Mumbai: Star India has been getting out of non-core activities to focus on its broadcasting (entertainment and sports) and digital businesses. Among the operations it bailed out on figure cable distribution where it exited from Hathway Cable & Datacom and news where it moved out from Media Content & Communication Services (the Star News venture).
Earlier this week, both Korea Bizwire and Variety.com reported that Star India has decided to sell its 50 per cent stake in the Indian home shopping joint venture venture Star CJ with South Korea’s CJ O Shopping to Providence Equity Partners following approval from the previous Indian government. The approval process took close to a year and got the Foreign Investment Promotion Board go-ahead just as the previous government's tenure was ending.
The quantum that the $40 billion corpus Providence Equity would be paying to buy out Star's holding was not disclosed but it would be done through a Mauritian subsidiary of the private equity fund. The deal between Star and Providence was signed on 29 May, said the Korea Bizwire report.
The remainder 50 per cent equity will continue to be with CJ O Shopping, which is part of the CJ group.
Both CJ and Star have invested $55 million in the joint venture, which began in 2009 as a six hour slot on Star Utsav, which was then expanded into a 24 hour Star CJ home shopping channel. It reportedly had estimated revenues of about $98 million and can continue to use the Star CJ brand for the next 12 months.
CJO Shopping is optimistic of ramping up business through Star CJ following its bringing in Providence as a "financial partner." Providence also owns equity in European home shopping venture HSE24, apart from having holdings in Indian cable TV distribution company Hathway Cable & Datcom and UFO Moviez.
The move comes at a time when the Network18 (now Reliance Industries) owned HomeShop18 is preparing for a public offering in New York.