NEW DELHI: Foreign direct investment (FDI) in media and entertainment sector revived in 2011-12 on the back of Disney‘s big stake buy in UTV Software Communications, after sagging in the previous year.

The sector received Rs 32.64 billion of FDI during the year, 72 per cent more than in 2010-11. FDI in media and entertainment industry in 2010-11 was Rs 18.87 billion and in 2009-10 Rs 23.40 billion.

The marquee transactions during 2011 included Walt Disney Company?s acquisition of an additional 41 per cent stake at a value estimated to be over $300 million in UTV Software (which took its shareholding in UTV to approximately 90 per cent), Providence Equity Partners? PE investment in UFO Moviez India ($58 million), and HSBC PE?s investment in Avitel Post Studioz ($60 million).

FDI in teleport hubs, direct-to-home, cable networks, and multi-system networks is proposed to be raised to 74 per cent from the present 49 per cent if they undertake to upgrade and digitise their systems with addressability.

MUMBAI: The Indian government has approved The Walt Disney Company South East Asia?s foreign direct investment (FDI) proposal to induct Rs 10 billion in The Walt Disney Company India.

The company wanted to induct foreign equity for business expansion and making downstream investment in other companies and subsidiaries of the company, including broadcasting companies.

Besides Disney?s proposal, the government also approved nine other FDI proposals amounting to Rs 2.59 billion approximately.

UK-based Packt Publishing has also received government approval to induct foreign equity amounting Rs 700,000 to carry out the business of publication books.

In February, The Walt Disney Company had increased its ownership stake in UTV Software Communications to 93 per cent from 50 per cent by buying out promoters stake for $377 million in line with the company?s strategic priority of increasing its brand presence and reach in key international markets.

The company had also assumed approximately $300 million of UTV?s borrowings.

Additionally, the company has paid $63 million to acquire an incremental six per cent stake for Rs 1,100 per share bringing its ownership percentage to 99 per cent.

Upon consolidation, the company recognised a non-cash gain of $184 million ($116 million after tax) as a result of adjusting the carrying value of the company?s 50 per cent equity investment to its estimated fair value of $405 million.

Subsequently, UTV was delisted from the Bombay Stock Exchange and its promoter Ronnie Screwvala was appointed as the managing director of The Walt Disney Company India.

Meanwhile, the FDI proposal of leading television network Multi Screen Media (MSM) was among the 16 proposals that were deferred.

MSM wanted to induct foreign equity to carry out the business of production of television programmes in India languages primarily for export, sale and distribution of Indian language audio visual production besides downlinking certain TV channels.

Hyderabad-based Scribble Media & Entertainment?s proposal to induct foreign equity for carrying out the business of its evening news publication Post Noon was also deferred.

MUMBAI: UTV Software Communications has posted a consolidated net loss of Rs 961.99 million (after minority interest), for the three-month period ended 31 December, pulled down by its movie segment and a rise in costs. All its business verticals posted losses.

In the corresponding quarter of the previous fiscal, the diversified media company had posted a net profit of Rs 399.83 million.

UTV?s revenue for the third quarter of the fiscal plummeted 35.38 per cent to Rs 1.65 billion compared to Rs 2.56 billion a year ago.

Meanwhile, expenses during the quarter under review jumped 15.49 per cent to Rs 2.36 billion, as against Rs 2.05 billion in the earlier year.

The company has consolidated the financials of UTV Communications (USA), IG Interactive Entertainment, UTV Global Broadcasting, UTV TV Content, UTV Games, First Future Agri & Developers, UTV New Media, Indiagames and the group?s stepdown subsidiaries -Ignition Entertainment, True Games Interactive, Genx Entertainment, UTV Entertainment Television, UTV Tele-Talkies, RB Entertainment and Vikatan UTV Content.

Television Segment

The television segment revenue stayed flat at Rs 1.03 billion (compared to Rs 1.02 billion in Q3 FY?11.

UTV posted operating loss of Rs 371.08 million from the segment, as against profit of Rs 207.01 million a year ago.

The company deployed Rs 4.92 billion in the television segment as of 31 December 2011.

Movie Segment

The movie business revenue skid 75.28 per cent to Rs 265.99 million, from Rs 1.08 billion in the earlier year. The segment loss stood at Rs 181.64 million, from a profit of Rs 270.07 million.

The company has deployed Rs 6.97 billion in the movie segment as of 31 December 2011.

Games and Interactive division

UTV?s gaming and new media business raked in Rs 306.91 million (compared to Rs 459.33 million in the year ago period).

The segment saw an operating loss of Rs 72.98 million, as against an operating profit of Rs 106.33 million a year ago.

The company has deployed Rs 9.21 billion in the segment.

MUMBAI: Morgan Stanley has submitted the delisting copy where Walt Disney intends to acquire 12,215,776 equity shares from the public shareholders of UTV Software Communications.

The Walt Disney Company has offered to pay Rs 835.03-1,000 per share to the shareholders to buy the remaining 49.56 per cent of UTV, which it does not already own. The offer will be open till 20 January.

Disney currently owns 20,497,994 equity shares (50.44 per cent stake) of UTV Software. In July 2011, The Walt Disney Company had conveyed its intention to take full control of UTV Software Communications.

Ronnie Screwvala and Zarina Mehta together hold 8,053,480 equity shares, equivalent to 19.82 per cent stake in the company taking the aggregate promoter holding in the company to 70.26 per cent of its current paid up equity share capital.

Post delisting, Disney expects to hold 80.25 per cent stake in the company, if it successfully acquires the shares of all public stakeholders. The remaining equity, meanwhile, will be held by UTV?s promoter group - Ronnie Screwvala.