MAM

ENIL to sell OOH arm to parent BCCL

MUMBAI: Entertainment Network (India) Ltd has agreed to sell its out-of-home (OOH) subsidiary to parent company Bennett, Coleman & Co Ltd (BCCL) at valuations that has visibly upset investors.


ENIL, which holds 83.44 per cent in Times Innovative Media (TIM), is selling its stake for a cash consideration of Rs 450 million.


The total deal, which includes debt, values TIM at Rs 1.1 billion. This is way below the price tag of Rs 12 billion that Goldman Sachs and Lehman Bros. had attached in 2008 when they acquired 16.56 per cent stake in TIM for Rs 2 billion.


The current deal with BCCL works something like this: BCCL agrees to repay ENIL‘s loan to TIM and also absorb the obligations under the financial guarantees provided by it on behalf of the OOH company. As on 8 July, the loans advanced by ENIL to TIM and the financial guarantee obligations of ENIL on account of TIM were Rs 425 million and Rs 312.3 million respectively.


Explains ENIL CEO Prashant Panday, "The total valuation of TIM stands at Rs 1.1 billion. For our 83.44 per cent stake, we get a direct cash Rs 450 million from BCCL, while the debt of Rs 560 million of the OOH business will also be borne by BCCL. So we will get Rs 1.01 billion cash on our books."
 
Shares of ENIL plunged 15.55 per cent to close Friday at Rs 198.25 on BSE. Several broking firms that Indiantelevision.com spoke to said OOH was a high-growth area and the valuation arrived at for the transfer to the parent company was unjustifiably low.


Panday offered a different view to the whole issue of valuations."The OOH business is strongly dependent on the contracts that you have. Two-thirds of the revenue of our OOH business is coming from the Delhi and Mumbai airport contracts, of which Mumbai contract is going to expire on 26 July. Delhi is now with a joint venture. We do not know what‘s going to happen, and thus, it makes sense for us to focus on our core business," he explained.


Panday, however, agreed that the investors were deeply dissatisfied. "I am not unduly worried about the stock price. We will explain to them how the move is beneficial for ENIL," he said.
 
ENIL reported a consolidated net loss of Rs 153.2 million for the fiscal ended March 2010 as against a loss of Rs 602.9 in FY09. Consolidated net income dipped marginally to Rs 4228.2 million, as compared to Rs 4270.9 million in the year-ago period.
 
Now with the surplus cash, Panday is looking forward for phase III to arrive. "We are going to keep this Rs 1.01 billion aside for investing in Phase III," he said.


In FY‘10, TIM‘s net loss stood at Rs 325.4 million on an income of Rs 1.56 billion. Expenses stood at Rs 1.71 billion.


ENIL had engaged Morgan Stanley to advise on the transaction.
 

Latest Reads

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/19/Kantar.jpg?itok=xfY0XRLu
81% Indians find ads intrusive: KMB study

MUMBAI: A well-executed multichannel campaign is a thing of beauty. But over one in four of the campaigns we see are not well integrated, and consumers are much more critical than marketers about campaign connectivity. Also, less than half of all campaigns take full advantage of different channels...

MAM Marketing MAM
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/19/Vivo_0.jpg?itok=fExeXtdx
Vivo YouTube campaign saw better response using Vogon

MUMBAI: Chinese smartphone brand Vivo rolled out a digital campaign - ViewTube, giving a new wave to YouTube’s ongoing TrueView Ads. With the launch of its V7 model, Vivo leveraged Google’s Director Mix tool to launch a campaign that offers a unique creative solution to gauge higher viewer...

MAM Marketing MAM
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/19/bigbazzar.jpg?itok=0GsnoZ_x
Big Bazaar launches game to promote R-day sale

MUMBAI: Hypermarket chain from Future Group, Big Bazaar, has created a mobile game to promote its mega property, ‘Big Bazaar Sabse Saste 5 Din’. Designed and executed by L & K Saatchi & Saatchi, Big Bazaar’s innovative deal game is set to transform the shopping experience in India....

MAM Marketing Brands
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/18/inito.jpg?itok=AwQJneLI
Inito gives anxious couples hope through its new ad

The desire to have children is something that is harboured by millions of couples. But, in the eagerness to do so, many times this whimsical process ends up becoming strenuous and stressful for many. In order to help beat the woes for many such couples, Inito, a medical technology company, has...

MAM Marketing Brands
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/18/Deloitte.jpg?itok=4oU7Xx11
Vernacular content consumers to be 2.5 times English by 2021: Deloitte

MUMBAI: Deloitte India has launched the eighth edition of its report on technology, media and telecommunications which predicts major advances in machine learning, voice over LTE (VoLTE) technology services and over-the-top (OTT) platforms, apart from other trends.

MAM Marketing MAM
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/18/break.jpg?itok=NI2aMi1o
IAA's new initiative seeks to end rigidity in office timings

A new social initiative titled #WorkToLiveToWork has been undertaken by the International Advertising Association’s (IAA) India chapter with Nandini Dias, managing committee member of IAA and CEO of Lodestar India, at the helm. Dias lost two colleagues in separate accidents related to railways...

MAM Media and Advertising People
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/18/pvr.jpg?itok=x_vsjB5p
PVR promotes cleaner air

MUMBAI: Cinema exhibition company PVR Pictures has launched a new campaign called, #BeTheCommuter with an aim to promote clean air and curb pollution.

MAM Marketing Brands
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/18/Pursuite.jpg?itok=rXkZMDm4
Pursuite.com forays into furniture

MUMBAI: In a move to further expand its product categories, Pursuite.com, India’s first B2B e-commerce platform for hospitality procurements has announced its entry into furniture, fixture and equipment (FF&E) segment.  With over 50 brands and more than 5000 products from across the globe,...

MAM Marketing Brands
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/01/17/Digital.jpg?itok=LM0bBxXP
Digital will be core of ad budgets by 2020: DAN report

MUMBAI: The increasing penetration of digital media in India is creating huge opportunities for marketers to reach out to untapped audiences in newer ways than before. Marketers are getting innovative with the way they choose to advertise to their audience.

MAM Media and Advertising Digital Agencies

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories