Zee Telefilms Ltd (ZTL) has announced the modalities of the restructuring of its news and cable businesses for the benefit of its shareholders. Subhash Chandra, Chairman, Zee Telefilms, said, “In keeping with its philosophy of building long term shareholder value, the Board of Zee had decided to restructure the various businesses. This would strengthen long term business prospects of each individual business, by providing focused management attention.”
He further said, “From December 18, Zee Telefilms Ltd would start trading as the demerged entity (to be renamed Zee Entertainment Enterprises Ltd) and two new companies would start their journey as independently listed entities. Though both Wire and Wireless India Ltd (WWIL) and Zee News Ltd (ZNL) were earlier part of ZTL, they would be able to unlock greater shareholder value as independent companies.”
It may be recalled that the Scheme of Arrangement had proposed to demerge assets and liabilities of the following undertakings of ZTL – cable distribution undertaking, news and regional broadcasting undertaking, and direct consumer business undertaking. The announcement date of the demerger of the cable undertaking and the news and regional undertaking was March 31, 2006, while for the direct consumer business, the date was April 1, 2006.
The Bombay High Court has already approved the demerger scheme of Zee’s cable undertaking and news and regional undertaking. The approval for the demerger of direct consumer undertaking is expected soon.
Pursuant to the Scheme, shareholders of Zee as on the relevant record date would get shares in the four separate companies, which would be independently listed on stock exchanges. These include:
Zee Telefilms Ltd, to be renamed Zee Entertainment Enterprises Ltd (ZEEL), which includes the global broadcasting business of ZTL, excluding the news and regional language channels. The channels in ZEEL will include Zee TV, Zee Cinema, Zee Sports, Zee Muzic, Zee Smile, Zee Jagran, Zee Premiere, Zee Classic, Zee Action, Zee Studio, Zee Café and Zee Trendz. ZEEL will also include the international broadcasting business of Zee in the US, Europe, Africa, the Middle East and in Asia Pacific.
It includes investments in Zee Turner India Ltd, ETC Networks Ltd and Ten Sports channel. ZEEL, which had revenues of Rs 10.5 billion in FY2006, has more than 900 employees.
Zee News Ltd (ZNL) includes the broadcasting business of ZTL, pertaining to the news and regional language channels. The channels in ZNL include Zee News, Zee Business, Zee Marathi, Zee Bangla, Zee Punjabi, Zee Gujarati, Zee Telugu, Zee Kannada and 24 Ghante. It also supplies content to the international broadcasting business of Zee in the US, Europe, Africa, the Middle East and in Asia Pacific. ZNL had revenues of Rs 2 billion in FY2006.
WWIL includes the cable distribution business of ZTL, which was earlier under Siticable Network Ltd. WWIL is the largest multi-system operator (MSO) in the country and has a connectivity of 6.7 million homes. WWIL operates 52 headends in 35 cities across the country. It has seven regional offices and over 500 employees. WWIL is embarking on a project to convert analogue cable homes in India into digital cable homes and also plans to expand from the current 35 cities to 66 cities in the next two years.
WWIL had revenues of Rs 1.5 billion in FY2006, which are expected to grow very rapidly in the coming years due to digitisation of cable and acquisition of last mile control.
In regards to ASC Enterprises Ltd (to be renamed Dish TV India Ltd or Dish), it includes the direct-to-home satellite broadcasting business. It is the first DTH operator in India, and currently the largest, with 1.6 million subscribers.
Dish has revolutionised television viewing in India through its high quality digital service delivered directly to consumers’ home. Not only does it provide 160 digital channels, it also offers several value added services to its consumers like electronic programme guide, parental lock facility, ability to record programmes, gaming channels, movies on demand, etc.
Dish is adding 30,000 subscribers every week and is targeting to reach 2.3 million subscribers by March 2007. Dish had revenues of Rs 0.8 billion in FY2006 and has over 800 employees.