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MUMBAI:
Mukesh Ambani-controlled Reliance Industries Ltd (RIL) would
own practically 100 per cent of the promoter companies of
Network18 if it decides to convert into equity shares all
the debentures the promoter firms would have issued to it.
The
amount the six promoter companies of Network18 group have
spent on buying shares in the rights issues of Network18 Media
and Investments Ltd and TV18 Broadcast Ltd adds up to Rs 22.11
billion. This is based on the information provided to the
stock exchanges on the number of shares acquired by these
promoters.
The
six promoter companies of Network18 are RRB Mediasoft, RB
Mediasoft, RB Media Holdings, Watermark Infratech, Colorful
Media and Adventure Marketing, all owned by Network18 group
founder Raghav Bahl and his wife Ritu Kapur.
The
rights issue prospectuses of both Network18 and its subsidiary
TV18 had said the six promoter companies - referred to as
the subscribing companies - would be issuing zero coupon
optionally convertible debentures (ZOCDs) to RIL's Independent
Media Trust (IMT) to raise money to subscribe to their entitlements
in the rights issues and also to subscribe to some portion
of the unsubscribed rights.
In
terms of the ZOCD investment agreement, IMT had agreed to
subscribe to such number of ZOCDs to be issued by the six
subscribing companies to enable these companies to further
subscribe to equity shares offered as a part of the rights
issues and any additional purchases.
If
Reliance's IMT, set up for this specific purpose, has invested
in ZOCDs worth Rs 22.11 billion, then it would have subscribed
to 221.17 million ZOCDs of Rs 100 each.
Each
ZOCD is convertible into 10 equity shares of the respective
subscribing company. On conversion of all the 221.17 million
ZOCDs, the six promoter companies of Network18 would issue
a total of 2.21 billion shares to Reliance's IMT.
Each
of the six subscribing companies has a paid-up and issued
share capital of Rs 0.1 million comprising 10,000 equity shares
of Rs 10 each. The six subscribing companies together have
60,000 issued and paid-up equity shares.
If
all the ZOCDs are converted into shares of the six subscribing
companies, the shareholding of Raghav Bahl and Ritu Bahl in
these companies would turn nearly non-existent. Raghav Bahl
and Ritu Bahl's stake would shrink to a negligible 0.0027
per cent from 100 per cent now.
These
assumptions are based on the disclosures made by TV18 and
Network18 on the number of shares acquired by the six subscribing
companies in the rights issues and the statements in the prospectuses
that the six companies would be borrowing from IMT the entire
amounts required to subscribe to their entitlements and additionally
unsubscribed shares in the rights issues.
Network18
and TV18 have not disclosed the number of ZOCDs that have
been issued to RIL's IMT or alternatively, the amount borrowed
by the six subscribing companies from IMT.
After
the rights issue, the shareholding of the six subscribing
promoter companies in Network18 has risen to 71.32 per cent
from 36.90 per cent before the issue. The total promoter holding
in Network18 is 73, including the shares owned by Network18
Employees Welfare Trust and Network18 Group Senior Professional
Welfare Trust.
The
shareholding of the six subscribing promoter companies in
TV18 has gone up to 3.96 per cent from less than 1 per cent,
while that of Network18 in TV18 has remained unchanged at
51.25 per cent.
The
promoter shareholding in TV18 dropped marginally to 57.04
per cent from 59.76, a reflection of the fact that the company
received an overwhelming response to the rights issue from
non-promoter shareholders.
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