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BK
Holding Mauritius Ltd, a wholly owned TV18 subsidiary,
is putting in $50.5 million upfront into Viacom 18,
the joint venture entity.
The
balance $40 million will be pumped in by Global Broadcast
News (GBN) over the next three years.
GBN
had earlier taken shareholders' approval for raising
$200 million and applied to FIPB for a GDR (global depository
receipts) issue. The FIPB nod is yet to come.
"The
$50.5 million will be our contribution to the JV. Viacom
is bringing in its existing channels in India as part
of their contribution. The cash being infused will be
enough to roll out a Hindi-language general entertainment
channel early next year. The further funding of $40
million will be through GBN. At that time, Viacom also
needs to invest an equal amount," says a source
in TV18.
Since
GBN will be TV18 Group's equity shareholder in Viacom18,
it has the option to acquire the shareholding of BK
Holding. This will take GBN's holding in Viacom18 to
50 per cent. GBN has entered into an option agreement
valid for a year.
"Upon
GBN exercising its option to convert the warrants and
on exercising its right under the option agreement,
GBN's shareholding (including indirect holding) in Viacom
18 would aggregate to 50 per cent," the company
said.
Viacom
and TV18 Group are setting up a 50:50 joint venture
company, Viacom18 Media Pvt. Ltd. Viacom18 will include
television, film and digital media content across numerous
brands as well as consumer products.
Viacom18
will be managed by a six-member Board with equal representation
by Viacom and TV18 Group.
Meanwhile,
Viacom and TV18 Group said they have completed the formalities
leading to the formation of their 50:50 JV in India.
They had announced their plans for the joint venture
in May 2007.
The head who would run the operations of the new entity
is, however, yet to be announced.
Besides
launching the GEC, Viacom18 will consist of original,
locally produced programming, acquisitions and content
from MTV Networks. The joint venture will also operate
the existing local channels of MTV Networks (MTV, VH1
and Nickelodeon India).
Viacom18 will also launch a suite of niche channels
from the MTV Networks portfolio, as well as new brands.
MTV
Networks International president and Board of Viacom
18 Media Pvt Ltd chairman Robert Bakish commented, "This
joint venture reinforces our long-term commitment to
the Indian market. We look forward to expanding our
presence in India with our new partners and are dedicated
to providing local audiences with high quality entertainment
that is reflective of their culture and the world around
them across every screen and for every demographic."
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