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NEW
DELHI: Media baron Subhash Chandra’s Essel Group is understood
to be seeking to raise as much as $500 million to fund expansion
and pay debt at some of its companies.
The
group may use the funds for DTH service provider Dish TV India
Ltd, multi-system operator (MSO) Siti Cable Network Ltd. and
schools operator Zee Learn Ltd, according to sources quoted
by Bloomberg.
Essel
joins Indian media companies including Network 18 Group and
Living Media India Pvt. in seeking capital. It is understood
that Essel has approached private equity firms for this purpose.
Dish
TV, India’s biggest provider of DTH services, and Siti
Cable are expanding as the nation makes digital television
services mandatory. Advertisement and subscription revenue
is forecast by G2Mi Research to increase 87 per cent by 2015.
“There
is a heightened interest among investors in two media segments,
broadcaster and cable companies, owing to a structural change
that’s anticipated in the country through digitization,”
Vivekanand Subbaraman, an analyst at MF Global Sify Securities
India in Mumbai, told Bloomberg.
Essel
is not in “active dialogue” with buyout firms, said
Himanshu Mody, group head for finance and strategy, in an
interview to Bloomberg. “We from time to time keep raising
expansion capital for various entities within the group.”
According
to the report, the money raised will not be used for Zee Entertainment
Enterprises Ltd., Essel’s largest publicly traded unit.
With a market capitalisation of 164.3 billion rupees ($3 billion),
Zee Entertainment had 3.3 billion rupees in cash at the end
of March, data compiled by Bloomberg showed.
Apart
from its television business, Essel manages firms that build
roads, runs a newspaper and makes packaging for toothpaste
and food companies.
Dish
TV had total debt of 12.1 billion rupees as of March 31 and
Siti Cable, which sells cable services to about 10 million
households in India, had 3.5 billion rupees of debt at the
time, data compiled by Bloomberg show.
Siti
Cable plans to raise Rs 3.2 billion selling warrants convertible
into equity to its owners including Essel.
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