|
ZEE TO MERGE; TO GO DIGITAL
SOON; SHARE ATTAINS NEW HIGH
Zee Telefilms Ltd (ZTL) chairman Subhash Chandra's
proposal to merge its international operations under Zee Multimedia
Worldwide (ZMW) seems to be gathering pace. The ZTL board
is to meet next month and approve the Deloitte Haskin & Sells
recommendation that every three ZMW shares should fetch four
shares of ZTL when the two companies are fused. The share
swap ratio that the advisor has recommended is 1.33 ZTL shares
for every ZMW share. The major beneficiary of the transaction
will be Chandra who owns close to 80% of ZMW.
Chandra and managing director Vijay Jindal
disclosed this to investment analysts at an investors conference
in Mumbai last week. Playing to the gallery, Jindal said that
the company was going from strength to strength and that the
addition of ZMW will actually boost ZTL.
Jindal said that the company was working on
taking its channels digital earliest by August-September this
year. It had struck a technological agreement with French
company Canal Plus under which the latter would supply its
Mediaguard conditional access equipment. The company will
also use Divicom's encoders and multiplexers for signal processing.
It is in discussion with Philips for supplying a stripped
down version of competitively priced IRDs for the cost-conscious
Indian consumers.
A bouquet of eight digitally compressed channels
is planned in phase one of its direct to operator digital
project. This will be followed by eight channels in two batches,
giving a digital bouquet of 24 channels for which it will
charge cable operators Rs 40-60 per subscriber. The phase
one package consists of Zee TV, Zee News, Zee Cinema, Music
Asia, three regional channels (the dubbing of its television
software library into Bengali, Punjabi and Marathi is on),
and possibly Nickelodeon, as it is in an advanced stage of
discussions with its management for a carriage deal. Initially,
Zee TV - and possibly the other three channels too - will
be broadcast in both analog and digitally encrypted modes
to allow the market to accept the shift to digital.
He pointed out that the company was working
on setting up an uplinking centre in Noida close to New Delhi
where it currently has its studios. (Already channels such
as Zee News and Star News are using microwave links to the
VSNL earth station to broadcast near live - there's a delay
of only a few seconds - to Indian viewers, despite this being
not permitted by the government.) Recently, however, the government
has allowed Indian-owned broadcasters to invest in their own
earth stations for live uplinking.
Jindal announced that ZTL is to set up a company
for its Internet services venture called zeenet.com in which
it will invest 25%. An investment of over Rs 5,000 million
is to be spent on zeenet.com over the next five years. The
company will offer Internet access services over cable - through
Siticable - to Indian subscribers, apart from developing portals.
Chandra said that if News Corp does not invest
in the ventures in which they are equal partners - he was
mainly referring to Siticable - as expansion plans are rolled
out its holdings will be diluted.
Jindal admitted that Zee TV has indeed conceded
market share to Sony Entertainment and Star Plus because of
their strategy to air big-budget high-cost Hindi movies. But
he added that the company's revenues and profits are rising
by leaps and bounds and that should be the concern of investors,
not viewership shares.
The ZTL scrip continued to rise on the Mumbai
stock exchange. It touched a new high of Rs 1835 during the
last week before dropping to around Rs 1,600 as the week ended.
|
