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The merger process is expected to be completed within five-six
months. Both ZTL and ETC informed the Bombay Stock Exchange of the
developments today. The boards of ETC and EIL have also approved
of the proposal.
A press release issued by ZTL pointed out that the merger will be
synergistic for the two companies as EIL has full fledged offices
in Bangalore and Hyderabad, and a network of associates across south
India.
ETC, which has plans to launch a southern language music channel,
would get access to ready infrastructure courtesy the merger.
This apart ETC also intends to launch an interactive entertainment
portal which it could do so immediately using the technical resources
available with EIL. The merger will also help shore up ETC's financials
as the combined entity will have a better balance sheet as compared
to those of the individual companies, the release states.
Earlier this year, ZTL had got board and shareholder approval to
whittle down EIL's equity capital from Rs 210 million to Rs 2.6
million. ZTL had also written off the value of its investment of
Rs 614.5 million in EIL and another subsidiary Zee Interactive Learning
Systems Ltd (ZILS). Consequent to this, ZTL had effected a corresponding
reduction in its reserves and surplus by Rs 612.2 million to Rs
34483.6 million.
The ZTL meeting today also approved the merger of five Mauritius
based operating entities viz. Software Suppliers International Ltd
(SSIL), Zee Telefilms International Ltd (ZTIL - syndication of ZTL
content), Zee MGM (managing movie channel MGM), Expand Fast Holding
Ltd, BVI (EFHL - providing satellite services to group broadcasting
companies) and Asia TV (Africa) Ltd (marketing and distributing
the Zee Network in Africa) with Asia Today Ltd (ATL), Mauritius
(broadcasting of Zee TV and Zee Cinema).
Addittionally, the board also put the stamp of approval on the
launch of a new television channel Jagaran which would have religious
content. This would be Zee's second attempt at launching a channel
on alternative lifestyles and religion after its earlier aborted
attempt through Chakra in 2001.
See related story-
Zee seeks to clean convergence
adventure from balance sheet
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