Mumbai: The board of Mid-Day Multimedia Ltd, publisher of the English-language afternoon daily Mid-Day, approved demerging its print business and transferring it to Jagran Prakashan Ltd (JPL), publisher of Hindi daily Dainik Jagran. In an interview, JPL’s chief financial officer (CFO) R.K. Agarwal says the deal will be a vehicle of growth for the company. Edited excerpts:
Walk us through the deal, and how much will Jagran Prakashan be paying for how much of a stake?
This is going to be through the process of demerger of their print business into JPL and thereby JPL is going to acquire Mid-Day English and also two (other) Indian-language newspapers—one is The Inquilab and the other is Mid-Day Gujarati. This is going to be a vehicle of growth for JPL. We see a lot of value in this transaction for shareholders of JPL.
Investor interest: Jagran Prakashan’s CFO R.K. Agarwal.
Can you confirm the price that you have paid and whether or not it is the promoters who are offloading their stake in this demerger?
There is no cash outgo. It is through the process of demerger which needs to be first cleared by Sebi (Securities and Exchange Board of India) and then approved by the high court. So it will just be (a) swap of shares.
Did the promoters offload any stake at all in this demerger process? Will they also be tendering stock in this share swap?
The entire print business is going to come to JPL through the process of demerger. As a result of that, what is going to happen is (that) all the shareholders of Mid-Day Multimedia are going to get two shares of JPL for...seven shares they hold in Mid-Day Multimedia. That way, not only promoters but all the shareholders of Mid-Day Multimedia are going to get two shares of JPL.
What is your understanding of the print media business and where it stands in terms of market share— whether or not this business is currently profitable for ‘Mid-Day’ etc?
Yes, their print business is profitable. In fact, it has registered a profit of about Rs10 crore for the fiscal year 2010. Based on projections for the current year, I believe it is going to be improving...and with JPL this is going to improve further.