19 February 2008
Dubai: In one of the largest media and entertainment foreign investments in India, The Walt Disney Company (Southeast Asia) Pte Ltd (TWDC), a subsidiary of The Walt Disney Company, is to invest approximately $203 million in UTV Software Communications Limited (UTV), a company statement said.
"At the same time, TWDC will also invest with UTV in UTV Global Broadcasting Limited (UGBL) by acquiring a 15 per cent stake worth $30 million. TWDC's investments in UTV and UGBL, together with the warrants to be issued to Ronnie Screwvala's Promoter Group, of Rs3.90 billion after exercise, makes this total deal size about Rs13.14 billion ($330 million)," the statement, a copy of which was e-mailed to said.
The transaction will be done through a preferential allotment to TWDC and the Promoters Group as per the Sebi regulations and will require a public announcement to all UTV shareholders.
The investment and the open offer are subject to shareholder and regulatory approvals.
"This partnership across Movies, TV Content, Interactive and Broadcasting endorses our leadership position in India and South East Asia and propels our already growing global story. Over the last year we have learnt to work well together and the speed at which this collaborative deal was put together is testament to the strong working relationship we have built," Ronnie Screwvala said.
This investment further establishes TWDC's entry into the Indian market and complements the fast-growing Disney-branded businesses and long-held joint-venture in ESPN STAR Sports.
As a result of this investment, TWDC's stake in UTV will go up from 13.7 per cent to 32.1 per cent on a fully diluted share capital basis.
The number of shares expected to be issued as part of the transaction is 9,352,500 at a price of Rs860.79. This is based on Sebi preferential allotment pricing formula with a five per cent premium.
Ronnie Screwvala consolidates Promoters' stake with an issue of 4,532,000 warrants at the same price as TWDC of Rs860.79, investing Rs3.9 billion after exercise.
At the same time TWDC will invest approximately $30 million for a 15 per cent stake in UGBL.
UTV will also invest $60 million for a 75 per cent stake in UGBL. The remaining 10 per cent will continue to be held by Ronnie Screwvala's Promoter Group.
UGBL is the parent company for its two wholly owned subsidiaries, Genx Entertainment Limited and UTV Entertainment Television Limited.
Genx has already launch-ed successfully two youth entertainment channels through the Bindass brand, whilst UTV Television Entertainment Limited has just launched The World Movies channel and is about to launch UTV Hindi Movies channel.
By Staff Reporter
Gulf News 2008. All rights reserved.
