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RIL, Network 18 shares rally in the wake of multi-layered deal
Riding high on account of a multi-layered deal involving Reliance Industries Ltd (RIL) and Network 18 group, the shares of the comapanies rallied on Tuesday with the shares of RIL surging 2.4 per cent and that of Network 18 group soaring to 20 per cent.
The two giants joined hands for a multi-layered deal worth about Rs. 4,000 crore, under which the Mukesh Ambani-led corporate giant would sell a part of its interest in Eenadu TV channels and would also fund rights issue of Network 18 firms.
The shares of RIL, the country's most valued firm, rose by 2.4 per cent to close at Rs 723.70. Shares of another group company Reliance Industrial Infrastructure Ltd rose by 4.8 per cent to Rs 302.10.
On the other hand, Network 18 Media and Investments Ltd shares soared 20 per cent to close at its maximum permissible limit for the day at Rs 46.60. Shares of TV18 Broadcast Ltd also rallied 20 per cent to close at Rs 33.70, its highest permissible limit for the day.
An independent trust set up by RIL would provide funds to the Network 18 group promoters, in the form of 'optionally convertible debentures', for rights issues.
As per the deal, RIL would be selling "a part of the interest owned by it in the ETV Channels" to TV18.
While RIL did not specify the exact financial details of various transactions, TV18 said its board has approved an outlay of up to Rs 2,100 crore for the proposed acquisition of ETV assets. In all, Network 18 and TV18 would raise about Rs 4,000 crore including Rs 1,700 crore contribution of the promoters.
As per the deal, RIL, which is setting up a pan-India broadband network, would also get preferential access to content and distribution assets of the electronic media group. RIL said it has invested about Rs 2,600 crore, through its group companies, for interest in various ETV channels, being operated and managed by Eenadu group.
RIL holds 100 per cent stake in Eenadu's four regional news channels (ETV Uttar Pradesh, ETV Madhya Pradesh, ETV Bihar, ETV Urdu), 100 per cent stake in five entertainment channels (ETV Marathi, ETV Kannada, ETV Bangla, ETV Gujarati and ETV Oria), and 49 per cent in two Telugu channels (ETV Telugu and ETV Telugu News).
After the deal, Network 18 group would get the board and management control of the ETV news channels and ETV non-Telugu entertainment channels. However, the existing promoters and management team of Network 18 group entities would retain their control even after the RIL funding, being made through optionally convertible debentures.
The deal also involves RIL's broadband venture Infotel getting preferential access to the content and distribution assets of Network 18 group, whose properties include business channel CNBC-TV18, English news channel CNN-IBN, alongwith various other channels and websites.
Riding high on account of a multi-layered deal involving Reliance Industries Ltd (RIL) and Network 18 group, the shares of the comapanies rallied on Tuesday with the shares of RIL surging 2.4 per cent and that of Network 18 group soaring to 20 per cent.
The two giants joined hands for a multi-layered deal worth about Rs. 4,000 crore, under which the Mukesh Ambani-led corporate giant would sell a part of its interest in Eenadu TV channels and would also fund rights issue of Network 18 firms.
The shares of RIL, the country's most valued firm, rose by 2.4 per cent to close at Rs 723.70. Shares of another group company Reliance Industrial Infrastructure Ltd rose by 4.8 per cent to Rs 302.10.
On the other hand, Network 18 Media and Investments Ltd shares soared 20 per cent to close at its maximum permissible limit for the day at Rs 46.60. Shares of TV18 Broadcast Ltd also rallied 20 per cent to close at Rs 33.70, its highest permissible limit for the day.
An independent trust set up by RIL would provide funds to the Network 18 group promoters, in the form of 'optionally convertible debentures', for rights issues.
As per the deal, RIL would be selling "a part of the interest owned by it in the ETV Channels" to TV18.
While RIL did not specify the exact financial details of various transactions, TV18 said its board has approved an outlay of up to Rs 2,100 crore for the proposed acquisition of ETV assets. In all, Network 18 and TV18 would raise about Rs 4,000 crore including Rs 1,700 crore contribution of the promoters.
As per the deal, RIL, which is setting up a pan-India broadband network, would also get preferential access to content and distribution assets of the electronic media group. RIL said it has invested about Rs 2,600 crore, through its group companies, for interest in various ETV channels, being operated and managed by Eenadu group.
RIL holds 100 per cent stake in Eenadu's four regional news channels (ETV Uttar Pradesh, ETV Madhya Pradesh, ETV Bihar, ETV Urdu), 100 per cent stake in five entertainment channels (ETV Marathi, ETV Kannada, ETV Bangla, ETV Gujarati and ETV Oria), and 49 per cent in two Telugu channels (ETV Telugu and ETV Telugu News).
After the deal, Network 18 group would get the board and management control of the ETV news channels and ETV non-Telugu entertainment channels. However, the existing promoters and management team of Network 18 group entities would retain their control even after the RIL funding, being made through optionally convertible debentures.
The deal also involves RIL's broadband venture Infotel getting preferential access to the content and distribution assets of Network 18 group, whose properties include business channel CNBC-TV18, English news channel CNN-IBN, alongwith various other channels and websites.
