Star Networks India has reduced its stake in Balaji Telefilms to 25.99 per cent. This is in conformity with the requirements of the Foreign Investment Promotion Board (FIPB).
R Kartik, Balaji Telefilms’s chief operating officer, confirmed this development.
On January 10, Balaji Telefilms had allotted 13,694,193 equity shares, aggregating to 21 per cent of the total post issued paid up share capital of the company, to Asian Broadcasting FZ LLC (ABF) - an affiliate of Star for a Rs 123 crore.
In a note to the BSE on that day, the Balaji board also mentioned that the investor through its open offer would acquire 32.24 per cent of the total paid up post issue share capital of the company.
There it was also mentioned that Star’s stake in the company would be reduced to 25.99 per cent by July 7, 2005, in accordance with the FIPB guidelines.
After the acquisition, Star had nominated two members to the Balaji board — Star Group chief executive officer Michelle Guthrie who joined as the non-retiring director and John Yu Leung Lau as additional director.
Balaji Telefilms is one of the key content providers to Rupert Murdoch’s Star group flagship channel in India — Star Plus. Analysts viewed the deal as a move by Star to consolidate its position in India.
Star Plus is currently the leader in the Indian cable and satellite industry with the highest viewership.
As on December 31, 2004, the promoters held 52.94 per cent stake in Balaji Telefilms. Foreign institutional investors held 18.53 per cent stake, while the combined holding of mutual funds and UTI was 0.68 per cent. 8.29 per cent was held by the public while non-resident Indians held 0.35 per cent stake.