| NEW DELHI: The Subhash Chandra-promoted Zee
Telefilms, which is planning a restructuring of its businesses, is toying hiving
off its distribution activities as a separate company.
On being specifically asked whether Siti Cable, the distribution arm
of the company and the country biggest MSO, would be hived off as
a separate company, a senior executive of Zee Telefilms admitted,
“There is a possibility."
However, the executive
was quick to point out that such an initiaive would not be done overnight. "We’ll
have to take the shareholders’ nod for any such restructuring,” he added.
Yesterday, Zee Telefilms Ltd informed the Bombay Stock Exchange (BSE)
that its board of directors would meet on 29 March 2006 to consider
restructuring the company's businesses.
Few
days back, Zee Telefilms finalised a deal for distribution of some family channels
in Afghanistan where the flagship is now available on cable networks. Applications
for landing rights in China too were made, but the chances are slim as China has
stringent laws for non-Chinese broadcasting companies. According to information
available with Indiantelevision.com, Zee Telefilms -- India’s largest
vertically integrated media company with its flagship Zee TV now inching back
to the No. 2 position ahead of Sony --- is toying a de-merger of its businesses. At
the moment, all aspects of the broadcast business like content generation, marketing,
distribution and syndication are carried out under the Zee Telefilms umbrella
with different divisions. The DTH business of Subhash Chandra is carried
out by another concern, ASC Enterprise, which has a content supply agreement with
Zee Telefilms for country’s first private sector DTH service Dish TV. And,
on Thursday Zee Telefilms announced at Ficci-Frames in Mumbai that the group’s
digital media initiative will be carried out through a separate company called
DMCL (Digital Media Convergence Ltd) that will facilitate the availability of
digital content in India in association with Intel. In the past, Chandra
has gone on record saying that the company would explore opportunities of unlocking
shareholders’ value by hiving off Siti Cable as a separate company and possibly
listing it also. Zee Telefilms subscription revenue (mainly garnered through
distribution of TV channels; in India, Siti Cable is the vehicle) has been on
the upswing with the company clocking Rs 1,751 million for the third quarter ended
31 Dec, 2005, signifying an increase of 7.8 per cent as compared to the corresponding
period last fiscal. Out of the total subscription revenue, domestic subscription
amounted to Rs 716 million for the Q3 2006. Meanwhile, the senior executive
of Zee Telefilms talking to Indiantelevision.com said that the company
in 2006-07 hoped to do better than the annual average advertising industry growth
of 9-11 per cent. Buoyed by good ad revenue (Q3 revenue: Rs 1,698 million,
an increase of 12.3 per cent YoY), Zee Telefilms is set to increase ad rates across
all channels by 30-40 per cent from the next financial year starting 1 April 2006. In
the last one month, shares of Zee Tele have been heading northward rising to over
Rs. 250 during the intra-day trading on 23 March from being quoted at Rs 168.15
on 22 February on the BSE.
On Thursday, the Zee Tele scrip closed at Rs 242.70 after opening
the day at Rs. 238.50.
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