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Express group’s restructuring proposal gets HC approval

Express group’s restructuring proposal gets HC approval
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First Published: Fri, Jul 25 2008. 11 15 PM IST

Standing tall: A file photo of Express Towers, a landmark building owned by the group at Mumbai’s business hub, Nariman Point. (Photo: Hemant Padalkar/HT)
Standing tall: A file photo of Express Towers, a landmark building owned by the group at Mumbai’s business hub, Nariman Point. (Photo: Hemant Padalkar/HT)
Updated: Fri, Jul 25 2008. 11 15 PM IST
Mumbai: The decks have been cleared for the Indian Express media group to beef up its media business with the Bombay high court approving the group’s restructuring proposal on Friday.
With the court go-ahead for the capital restructuring plan, the media business of Indian Express Newspapers (Mumbai) Ltd will now be handled by Indian Express Ltd, a firm incorporated in 2003. The parent also owns Express Towers, a landmark building at the city’s business hub, Nariman Point.
Standing tall: A file photo of Express Towers, a landmark building owned by the group at Mumbai’s business hub, Nariman Point. (Photo: Hemant Padalkar/HT)
Following the restructuring, the parent will develop the real estate business in partnership with ICICI Venture.
In a 25 January statement issued when the partnership with ICICI was first announced, Viveck Goenka, chairman and managing director of the group, had said: “Our partnership with ICICI Venture is one more step in the resurgence of the Express Group… The coming months will see a sizable investment in all our publications and brands. We have, in the past two years, invested Rs150 crore in new technologies, units and presses. The company plans to focus on building its brands and launching new publications and editions.”
According to the petition filed by Indian Express Newspapers (Mumbai) Ltd with the high court, the demerger of the print media undertaking would help the firm “to concentrate on its business of renting/leasing and licensing of office space in Express Towers” and thus increase its profitability. “Restructuring by way of demerger of publication business would result in more efficient use of existing resources, increase in scope of operation on a broader scale, increasing efficiency in business operation and realizing the potential for further growth,” the petition said.
Indian Express will now focus on the print media business of the group and “combat fierce competition arising out of entry of new players,” it said.
“The scheme appears fair and reasonable and is not violative of any provisions of law,” the court order from a single bench division, headed by Justice S.A. Bobde, wrote.
Vaidehi Thakar, the legal head of the company, declined to comment.
Set up in 1932, the group publications include an English daily The Indian Express; a financial daily, The Financial Express; and regional dailies such as Jansatta and Loksatta, besides Screen, a film magazine. It also runs an online portal Expressindia.com. The Financial Express competes with Mint.
The proposed restructuring, approved by the board of directors of Indian Express Newspapers (Mumbai) Ltd on 18 February, includes capital restructuring of the firm, demerger of its print media undertaking and “issue of shares by Indian Express to the shareholders of the demerged company on a proportionate basis” in compliance with the Companies Act.
The firm had sought the high court nod for a “Scheme of Arrangement” between Indian Express Newspapers (Mumbai) Ltd and Indian Express Ltd and their shareholders on 16 July. As part of the partnership, ICICI Venture will advise on upgradation and management of the property, and proposes to acquire a minority stake in the property business, and participate in maximizing the potential of Express Towers, the company had said.
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First Published: Fri, Jul 25 2008. 11 15 PM IST