NEW DELHI: Homeshop18 is to be listed on the New York Stock Exchange, and the fact that Reliance industries has acquired Network18 which holds 54.5 per cent in Homeshop18 is not expected to bring about any change of plans.
In fact, Homeshop18 CEO Sundeep Malhotra has assured his employees that its $75M IPO and the future of its management team will not change. However, it is learnt that three board members will change. There are expectations that Reliance may in fact double the IPO.
The concern of the employees flows out of the fact that many of them have stock options in the firm.
According to Homeshop18's filing, in the TV18 HSN Holdings Limited Employee Stock Option Plan 2008 it says, “As of September 30, 2013 options for a total of 2,486,500 ordinary shares were outstanding, of which options for a total of 2,111,500 ordinary shares had vested and options for a total of 2,070,750 ordinary shares had become exercisable. As of September 30, 2013, 209,750 ordinary shares had been issued upon exercise of options granted under the plan.”
Following the preliminary filing with the Securities and Exchange Commission (SEC) this April, the company is expected to submit a revised offer document soon.
NW18 HSN SEC, registered in Cyprus, is not expected to receive any proceeds from the sale of ordinary shares. However, the parent company NW18 which will be participating in the IPO will provide funds in rupee equivalent of $42.3 million to HomeShop18 from the proceeds, and HomeShop18 can use these funds to purchase equity interest in its Indian subsidiary.
HomeShop18 in October 2013 entered into a $14-million follow-on funding round with Korea's GS Home Shopping (GS) funds managed by OCP Asia Ltd (OCP Asia) and Network18.
NW18 continues to be the majority shareholder (54.5%) in HomeShop18. SAIF Partners (25.2%), GS Home Shopping (17.1%) and OCP Asia (6.4%) are the other existing investors.