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SPNI is a profitable company which will become stronger after merger: NP Singh

SPE Chairman of Global Television Studios and SPE Corporate Development Ravi Ahuja asserted that India is an important market for Sony and that the company is committed to long-term investments here

e4m by Javed Farooqui
Published: Dec 22, 2021 2:10 PM  | 5 min read
NP singh

It's official! Sony Pictures Networks India Private Limited (SPNI) and Zee Entertainment Enterprises Ltd. (ZEEL) have signed definitive agreements to merge ZEEL with  SPNI and combine their linear networks, digital assets, production operations and program libraries.

Under the terms of the definitive agreements, SPNI will have a cash balance of $1.5 billion at closing, including through infusion by Sony Pictures Entertainment (SPE), the parent company of SPNI, and the founder promoters of ZEEL. SPE, through a subsidiary, will pay a non-compete fee to ZEEL founder promoters, which will be used by them to infuse primary equity capital into SPNI.

The equity capital will entitle the ZEEL promoters to acquire shares of SPNI, which would eventually equal approximately 2.11% of the shares of the combined company on a post-closing basis. After the closing, SPE will indirectly hold a majority 50.86% of the combined company, the promoters (founders) of ZEEL will hold 3.99%, and the other ZEEL shareholders will hold a 45.15% stake.

In an internal communication to the staff, SPNI MD & CEO NP Singh said that he is delighted to be on the board of the merged entity besides identifying new growth opportunities for SPE in India. "In his mail to you, Ravi has already spoken about my upcoming role as Chairman, Sony Pictures India, a division of SPE. I am delighted to be on the board of the merged company, providing strategic guidance and support to the operating team in achieving our vision. In addition, I will be overseeing all SPE investments in India while also identifying new growth opportunities to amplify Sony's footprint in India," the email reads.

He also said that SPNI is a profitable company which will become bigger and stronger after the merger with ZEEL. For the fiscal ended 31st March 2021, SPNI had reported consolidated revenue of Rs 5721.6 crore with a net profit of Rs 582.2 crore.

"Backed by your dedication and perseverance, SPNI is a very profitable business and once merged, it will take on another dimension, become much larger and open many opportunities for you. Your contribution, unstinted commitment and cooperation is the mantra to take us through the years ahead. I am counting on your continued support."

Singh also said that the work in SPNI will continue full throttle on an as-is basis until the merger deal is effectuated. "I will be happy to share information with you as and when we reach milestones along the new journey. However, in the interim, should you have any questions, please reach out to me directly," he stated.

In his email to the SPNI employees, Sony Pictures Entertainment (SPE) Chairman of Global Television Studios and SPE Corporate Development Ravi Ahuja asserted that India has been an important market for Sony. He also stated that the Japanese multinational conglomerate is committed to long-term investments in India.

"For years, India has been an extremely important market for us — and that has never been truer than it is today. We have been in the market for a long time. And as our pending merger with Zee shows, we are committed to long-term investment in India and look forward to growing our presence here in the decades to come," the email from Ahuja reads.

While thanking SPNI MD & CEO NP Singh for bringing the deal together, Ahuja said that the media veteran will have a position on the combined company’s board besides assuming a broader executive role at SPE as Chairman, Sony Pictures India.

"I also want to thank SPNI Managing Director and CEO NP Singh and his teams for their tireless efforts — not only for bringing this deal together, but for strengthening the SPNI business over the last several years to what it is today. As you can see in the release, upon completion of the deal, NP will have @ position on the combined company’s board of directors and will assume a broader executive role at SPE as Chairman, Sony Pictures India. In this new role, NP. will oversee and coordinate SPE's business interests and investments in India, including the newly merged company," he noted.

He also said that the strength and combination of ZEE-Sony leadership teams, content creators and robust TV and film libraries will create a company with vast resources to compete with the world’s largest domestic and global platforms vying for market and audience share.

With the agreements in place, the two companies will now get down to working out the modalities of combining the assets of both the entities. The merged entity will comprise 75 TV channels, two OTT platforms, and two film production & distribution companies besides a content library of 300,000+ hours of content.

"And we have a lot of work to do in determining the best way to integrate each companies' linear networks, digital assets, production operations, program libraries and our teams. We look forward to sharing more about this integration and the combined company in general in the days ahead," Ahuja stated.

He acknowledged ZEEL MD & CEO Punit Goenka and his team for making the merger a reality. "I want to take this opportunity to acknowledge Punit and his team at Zee and their hard work and dedication to help get us all to this important moment. Together, they have built an outstanding company, and we look forward to working together."

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