The Sony Group is likely to convert SET Singapore into a subsidiary of SET India in a bid to consolidate operations before going in for an initial public offer by its Indian unit. Sony has decided to restructure the holdings of the two companies to enhance valuations for the proposed IPO. A final decision on the restructuring route is expected to be taken in two months.
According to sources, making SET Singapore the subsidiary of SET India is the simplest possible route for Sony. As there are several legal and regulatory issues involved, a final decision will be taken in a couple of months.
The other route is for SET India (Sony Entertainment Television India) to buy out the library of SET Singapore, which is the broadcasting arm. SET India is the marketing, ad sales and distribution company. The third route available is to go for a cross border merger. This, however, is a distant possibility.
Under this process, SET Singapore will become an overseas division of SET India. Sony Group holds 61 per cent stake in SET India, while 31 per cent is with the Indian partners. The balance 8 per cent is with the foreign institutional investors. SET Singapore has a similar shareholding structure.
According to company sources, IPO would not come before the second half of 2003. SET India has already made massive investments this year in acquiring the Cricket World Cup telecast rights and producing the Madhuri Dixit marriage show ’Kahin Naa Kahin Koi Hai’. The company will need funds next year for acquiring more cricketing and other programming properties. Besides, it has yet to make part payment for the acquisition of the Cricket World Cup telecast rights. Earlier, the Indian partners had privately placed a minor part of their stake in SET India, which effectively valued the company at around $2.5 billion.