| MUMBAI:
Zee Entertainment Enterprises Ltd (Zeel) is in advanced negotiations to gobble
up loss-making Hindi general entertainment channel 9X, a deal that would offer
the entertainment broadcasting powerhouse a tax benefit of around Rs 1.7 billion. Sources
say the deal will sail through if INX Media, the company that holds 9X, is able
to settle with its creditors amounting to Rs 1.2 billion.
"INX
Media is looking at settling the dues at Rs 600-650 million. It is asking content
producers and cable operators to arrive at an agreed price and settle the dues
by March-end. Zeel, in turn, is confirming with cable operators if the dues have
been cleared," the sources add. 9X's
accumulated losses are over Rs 5.5 billion, burning cash in programming and distribution.
Launched in 2007, INX Media ran out of money and streamlined costs by keeping
the GEC afloat with old shows and movies from its library since November 2008.
9X also runs music for six hours a day. "We
will basically be buying the losses of 9X. The main reason for our interest in
9X is the tax benefit that we will get. The cost to us will be Rs 600-650 million.
But the deal is subject to INX Media settling with the creditors," a source
in Zeel says. INX
Media will hive off 9X, keeping the music channel 9XM with itself. This forms
part of the recast plan, steered by former Zeel CEO Pradeep Guha, and approved
by the clutch of private equity investors, including New Silk Route, Temasek Holdings,
New Vernon Private Equity Fund and Kotak Private Equity, who own INX Media. Zeel
will merge 9X with itself, a move that will enable it to claim tax benefits. "The
merger route is the most feasible for us. We will be acquiring 9X and not 9XM,"
the source says. Zeel
has been on a consolidation drive, bringing six of the group's regional entertainment
channels under itself and buying out sports broadcasting network Ten Sports. "We
are not sure whether we will run 9X as is. 9X's programming, which includes movie
rights, is not of prime interest to us," the source says. INX
Media was not willing to comment elaborately on the negotiations. "INX Media
is working on a restructuring plan. Part of this initiative includes continuing
and growing the music and other niche genres and discussions with the company's
creditors to come to a settlement on outstanding dues. Discussions with Zeel is
part of this process," the company states.
INX News, owned by Indrani
& Peter Mukerjea and INX Media, had earlier sold news channel, NewsX, to Vinay
Chhajlani, an Indore-based promoter of regional dailies and web properties, and
former Businessworld editor Jehangir S Pocha. Later, in a restructuring exercise,
promoters Indrani and Peter stepped down from the management of INX Media. | 
