MUMBAI: The Subhash Chandra-promoted Zee Telefilms has decided to hive off its news business into a separate company, Zee News Pvt Ltd, which will have scaled down foreign holding.
 
 

The restructuring was done to comply with government regulations, which stipulate that news channels uplinking from India should not have more than 26 per cent foreign investment. Indian shareholding of 51 per cent is mandatory too.

In Zee News Pvt Ltd, Jayaneer Capital Private Ltd will hold 40 per cent and Churu Trading Company Private Ltd 25 per cent equity stake. Both are Indian companies with Indian promoters.

In the restructured news entity, Zee Telefilms' equity stake is 35 per cent, which works out under a complex formula to about 20 per cent of foreign holding to comply with the 26 per cent cap.
 
 

How does this formula work that is based on a total 58 per cent total foreign holding in Zee Telefilms? The foreign holding in the restructed Zee News Pvt Ltd has been calculated at the rate of 35 per cent (Zee Telefilms holding in Zee News) of 58 per cent (foreign holding in Zee Tele).

The details of the restructuring were confirmed to indiantelevision.com by company sources after Zee Tele informed the Bombay Stock Exchange (BSE) and the government of the changes.

As part of the regulatory requirements, Zee Tele informed BSE, the company is planning to transfer its business and activity relating to news and current affairs, including assets and liabilities,to Zee News Pvt Ltd.

The activities comprise gathering of content, editing, making it broadcast worthy, broadcasting and uplinking content on Zee News channel and on certain time slots of regional language channels.

The Zee Tele board will meet at a later date to approve the changes and the appropriate terms and conditions effected in the company relating to the news business.

The restructuring of the news business was necessitated as being part of Zee Telefilms Ltd, the foreign holding in the news channels --- Zee News and Zee Business --- were way above the stipulated government norms.

The government has set 30 September as one the many extended deadlines for news channels to comply with uplinking guidelines. Business channel CNBCTV18 will also have to restructure to comply with the guidelines.