Fitch downgrades TV18

MUMBAI: Credit ratings agency Fitch has downgraded TV18, raising concerns over the company's financial profile over the nine-month period of the current fiscal and deployment of large cash balances to support subsidiaries and group companies.

TV18's operating loss in FY'09 on a consolidated basis has been primarily due to the significant launch expenses and development costs of Web 18, and to some extent due to expenses related to its print media businesses including one time charges.

Also disturbing is the pressure on profitability on TV18's core news operations business due to a significant slowdown in the renewal of advertising contracts.

"The company has utilised a substantial portion of its liquid balances (around Rs 6.76 billion as of FY'08 and Rs 2.6 billion as of 9-month period of FY'09) in investments in group companies, primarily in Infomedia18 and direct investments into other group companies," Fitch said.

Fitch has downgraded the rating to 'BBB' from 'A.' It has also lowered its rating outlook to negative from stable.

Fitch ratings on the following instruments

Rs 1.25 billion long-term loan - Downgraded to BBB (from A)

Rs 670.1 million term-loan - Downgraded to BBB (from A)

Rs 850 million fund-based working capital limits - Downgraded to BBB/F2 (from A/F1)

Rs 70 million non fund-based working capital limits - Downgraded to F2 (from F1)

Rs 250 million commercial paper/short-term debt programme - Downgraded to F2 (from F1)

TV18 has raised fresh debt to meet the increased requirement of working capital and support its investments. "Net debt levels increased substantially to Rs 6.6 billion at the 9-month period of FY'09 compared to negative net debt levels at FY'08," Fitch said.

On the positive note, however, is the possible gain of advertising revenues from the upcoming elections and the budget coverage after the new government is formed.

"TV18 has also been actively undertaking cost cutting measures across its businesses, which along with the one-time nature of some of Web18's losses due to initial launch expenses and charging off development costs, could help stem operating losses. In addition, TV18 has put on hold its earlier investment/expansion plans into new businesses such as print media, which could reduce the extent of negative free cash flows to be funded through FY'10," Fitch said.

"Realisation of benefits from the company's ongoing operational initiatives, coupled with a revival in advertising revenues materially benefiting credit metrics could lead to the outlook being revised back to stable, as could material reductions in net debt levels through equity infusions and/or monetisation of equity stakes in subsidiaries/group companies," the ratings agency added.

Latest Reads
Jawahar Goel raises alarm of emerging Star cricket monopoly (updated)

This is Jawahar Goel at his inimitable best. The TV industry old timer and chairman & MD of India’s largest satellite TV distribution platform Dish TV.

Television TV Channels Sports
ABP News TV says it has crossed 7-mn mark on Twitter

@abpnewstv, the Twitter handle of ABP News, has claimed to have crossed seven million followers. This growth, ABP says, has been fuelled by what it called real-time updates and engaging content on latest news and happenings from across India.

Television TV Channels News Broadcasting
Men@10's unique content to help Living Foodz sustain its position, says Amit Nair

Watch your favourite lifestyle shows this month, as Living Foodz' ‘Men@10’ has got under way; it airs every Monday to Friday between 10 - 12 midnight. Living Foodz business head Amit Nair said, “Living Foodz has sustained its position in the lifestyle genre, owing to its unique content. Our shows...

Television TV Channels Factual & Documentary
Carnival Cinemas appoints Mohan Umrotkar as CEO

Spearheaded by Dr. Shrikant Bhasi, Carnival Cinemas has appointed Mohan Umrotkar as its chief executive officer. He takes over from P. V. Sunil who has been elevated as the managing director of the company.

Television TV Channels People
Why India expansion makes sense to BBC

MUMBAI: BBC is rising to the fact that expansion in India makes logical sense. With the proliferation of news sources, BBC is witnessing a mobile revolution especially in India, Asia and Africa. "It would be presumptuous to think that people would come to our websites just because we’ve launched...

Television TV Channels News Broadcasting
STAR, Zee & Times top media list, Airtel & Tata Sky entrenched

MUMBAI: STAR, Zee and Times have continued to lead in the list of top 10 media groups in India. The growth of television distribution firms, Business Standard reported, has been one of the major changes the listing has seen in five years. Bharti Airtel and Tata Sky are now well-entrenched in the...

Television TV Channels GECs
English News, Religious & Music HSM genres lose: Chrome DM

MUMBAI: 'Sports - All-India' genre has emerged as the most benefitted genre with 1.92 per cent. DD Sports has topped the chart with 95 per cent opportunity to see (OTS) in week 33, Chrome Data Analytics & Media reported.

Television TV Channels Viewership
Doordarshan welcomes young anchors, expects CVs by 31 Aug

NEW DELHI: In a attempt to infuse new and fresh talent, the public broadcaster Doordarshan has invited youngsters to join the organisation as anchors and presenters.

Television TV Channels Terrestrial
Zee brings first English-language South Asian reality show to U.S, ropes in Lexus & Wells Fargo

Zee Entertainment Enterprises (ZEEL), a worldwide content company, is breaking new boundaries globally by making a tremendous impact in the U.S. The organisation’s leading Hindi channel, Zee TV, which was the first Hindi channel to be launched in the U.S. in 1998, is now making its presence felt in...

Television TV Channels GECs

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories