| Restructuring of consumer business for Dish TV
The direct consumer business is marked by division of activities
between the DTH license holder ASC Enterprises Limited (ASCEL) and
the subsidiaries of Siti Cable.
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| * Percentage
holding to be decided by the board after valuation by independent
valuers. |
As per the proposal, the direct consumer related business of ZTL
would be de-merged into ASCEL, with the shareholders of ZTL receiving
shares in ASCEL in proportion.
This has been done due to lack of clarity in structure, inefficiencies
in tax and diffuse strategic focus.
The proposal has met with in principle approval of the Zee board.
The board has authorised management to evaluate the proposal and
its effect and present to board for final approval.
The scheme of arrangement would require approval of the stock exchange,
shareholders and creditors of Zee and from Bombay High Court.
Restructuring of news business; regional channels included
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| # ZTL
shareholders would get 137 shares of Zee News Ltd for 100 shares
in ZTL. ZTL foreign shareholders will get upto a maximum of
26 per cent. Any additional shares accruing would be converted
into Preference Shares. Currently the FII holding is 31 per
cent, hence everyone will get equity shares. The equity shares
held by foreign promoters would be shifted to India as domestic
holdings. |
In compliance with the news uplinking guidelines with effect from
October 2005, newsgathering activities of ZTL were transferred to
Zee News Limited, while downlinking and commercial exploitation
of all news-bearing channels was retained under ZTL.
"Despite a compliant corporate structure for news bearing
channels (particularly regional channels), we have felt it important
to bridge the divide and bring all the operational activities together,
to create strategic focus, remove tax efficiencies and unlock shareholders
value," Chandra said.
Under the scheme of arrangement, the news-related business (Zee
News, Zee Business, Zee Bangla, Zee Punjabi, Zee Marathi, Zee Telegu
and shortly to be launched Zee Kannada will be subsumed into Zee
News Limited (ZNL).
The company will in due course be suitably changing the name of
Zee News Ltd.
As the result of preparation of news business the shareholders
of Zee Telefilms will get proportionate shareholding in ZNL. As
per the formula that has been worked out 137 ZNL shares will fetch
100 shares in ZTL.
In case the allotment works out to more than 26 per cent (which
is the permissible limit of foreign investment in news ventures
in India), the FIIs would be allotted preferentail shares of equivalent
value on a proportionate basis.
Zee News Limited would be listed on all stock exchanges where ZTL
is listed.
Restructuring of cable business
Siti Cable has been hived off into a separate entity, Chandra pointed
out, as the cable assets were under-utiliseted, despite large and
well-positioned investments in the cable business.
To properly address the emerging business opportunities in digitisation
of cable and convergence, there also are large funding requirements.
And the regulatory requirement applicable to cable distribution
is very different to broadcasting.
Combined with the fact that the competitive environment of distribution
business is also different, the Zee board felt that an invigorated
corporate and governance set up was essential to aggressively address
the emerging opportunities.
 |
| * Shares
held by foreign promoters will be shifted in India as domestic
holding to bring down the overall foreign holding to about 35
per cent. Cable business is allowed foreign holding upto 49
per cent. |
As per the scheme of arrangement, the cable business of Siti Cable,
a 100 per cent subsidiary of ZTL, and the cable related business
of ZTL would be de-merged into Wire and Wireless (India) Limited
(WWIL), a new company incorporated for the purpose.
The shareholders of ZTL would receive shares in WWIL in proportion,
as consideration.
WWIL would in turn issue preference shares to the shareholders of
ZTL.
Meanwhile, the Zee scrip moved in a narrow band today. While opening
at the BSE on 238.90, the scrip touched a high of 243.35 and a low
of 236.10 before closing the day at 239.55. The stock is expected
to react tomorrow as the restructuring of Zee's businesses was announced
in the evening, after the bourses had closed.
MY Khan joins Zee board
Dr MY Khan, chairman of Banking and Advisory Council, YES Bank Ltd,
has joined Zee as a director on the board of the company. Dr Khan
has previously served as chairman of J & K Bank. He is also
a director on the Board of Bharat Hotels, as well as an advisor
for Berenson & Company, New York.
Also Read:
Zee to
rejig; mulls Siti Cable hive-off
Zee News
rejigs to meet uplink norms
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