Raj Television eyes print, plans stake sale to PE

Raj Television eyes print, plans stake sale to PE
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First Published: Wed, Sep 10 2008. 10 32 PM IST
Updated: Wed, Sep 10 2008. 10 32 PM IST
Chennai: Media and broadcast company Raj Television Network Ltd plans to enter the print business and is “open to acquiring an existing (Tamil) newspaper” even as it is looking to raise Rs50-100 crore from private equity firms.
Raj Television would look to offer 5-10% stake for the fund infusion. According to the Bombay Stock Exchange (BSE) website, the company’s promoters hold 72.48% as of June.
“The idea is to be seen as a complete media house in the long term,” said B. Sukumaran, adviser, corporate planning and strategy. “The promoters are willing to go down to 51%.”
Raj Television, which raised Rs52.81 crore in an initial public offering in February 2007, wants funds for the construction of a studio and office complex, its movie production business and other plans.
“We will see how the stock market performs and then take a call on when we would raise the funds,” said Sukumaran. “We could issue warrants that are convertible to equity, or we could also take the FCCB (foreign currency convertible bond) route. As for the print medium, we are looking at the option of acquiring an existing Tamil newspaper.”
He said “certain players” operating in the regional print business have approached his company for selling their businesses and that the firm is “still evaluating its options”. He declined to elaborate.
Tamil Nadu has around 30 regional language newspapers, including heavyweights such as Dinakaran, Dinamalar and the Daily Thanthi. Dinakaran, owned by the Sun TV group, is the market leader, with a total daily circulation of around one million copies during January-June, according to the Audit Bureau of Circulations.
Like most Indian media companies looking to expand their portfolio, Raj Television says a print presence would help in terms of selling advertisements across television—where it runs four Tamil channels—and newspapers.
“If the newspaper is around three-four years old, then we will not have problems in getting advertisements as there would be no gestation period,” said Sukumaran.
The company recently entered the film production business and is producing three movies, including one set to be released by end-October. “Initially, we will start with lowbudget movies. We may look at setting up a subsidiary for film production as part of our long-term goals,” said Sukumaran.
He said the movie business is strategic as the cost of film satellite rights for television has increased substantially in recent years. “We were forced into film production as this would mean that we get the satellite rights free of cost.”
The company is expecting revenues to rise 40-50% by the end of fiscal 2009. With the launch of state-owned cable television network, Arasu Cable TV Corp. Ltd, it believes there would be more transparency in subscriber data, helping boost revenues at paid TV channels.
Prakash Dharmarajan, president of advertising firm Ogilvy and Mather in Chennai, said, “If the company wants to position itself as a complete media house then, by definition, it should be present in print medium too. In terms of advertising, initially, there may not be much synergy because the one who advertises would see how much he can achieve through which medium. Only after that, will he see the cost benefits of advertising in both television as well print. But, again, it depends on what kind of newspaper they are looking at.”
Raj Television shares closed 2.5% down at Rs97.05 on BSE on Wednesday.
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First Published: Wed, Sep 10 2008. 10 32 PM IST