The Sun TV group has forged a joint venture with the Malaysia-based Astro All Asia Network Plc to provide direct-to-home services in India. The entities believe that they would be able to provide these services in the second half of 2007.
A prepared statement from Astro informed that under the agreement, South Asia Entertainment Holdings Limited (SAEHL), a wholly owned unit of Astro, would acquire 20 per cent stake in Sun Direct TV Pvt. Ltd for 166 million dollar (nearly Rs 747 crore). Under the existing Indian media regulations for foreign investment in DTH, this is the maximum permissible stake that can be acquired.
The new venture aims to provide direct-to-home satellite TV services in India. The joint venture’s peak funding is estimated to be $670 million and will be incurred over the first five years of operations, through a mix of equity and debt capital. The annual cash flow is expected to become positive in the sixth year of operations.
Astro will fund the acquisition through its existing debt facilities of $300 million or through new alternative borrowings.
The statement further added, “DTH services would be offered utilising satellite transponders on INSAT 4B, which was launched in March 2007.”