New Delhi: Amar Ujala Publications Ltd, the publisher of Hindi daily Amar Ujala, is close to a financial infusion to the tune of about Rs100 crore from DE Shaw Composite Investment (Mauritius) Ltd Pcc., an investment firm that already holds 18% stake in the newspaper company.
Amar Ujala will take the funds as debt convertible into equity.
The exact nature of the deal—especially what the Rs100 crore would be worth in future equity—is still being worked out.
As per Indian laws, a foreign investor can hold a maximum of 26% in a newspaper publishing company.
DE Shaw picked up 18% stake in the firm in July 2007 at Rs112 crore, valuing the publisher at Rs650 crore at that time.
“We are raising this money to fund our organic and inorganic expansion,” said Atul Maheshwari, managing director, Amar Ujala. “We are launching our latest edition in Lucknow in July.”
Amar Ujala, which currently has 18 editions across Jammu and Kashmir, Himachal Pradesh, Punjab, Chandigarh, Uttarakhand and Uttar Pradesh, was India’s third-largest read daily in terms of “total” readership during 2007, according to the Indian Readership Survey.
Currently, 82% of the firm is held between Atul Maheshwari, his brother Rajul Maheshwari, Ashok Agarwal, who is the chairman of the firm, and his son Manu Anand.
For the year ended 31 March, the company had an Ebidta (earnings beforeinterest, depreciation, tax and amoratization) of Rs50 crore on revenues of Rs345 crore, said chief financial officer Sumit Sood.
Sood also said the firm is likely to go for an initial public offering of shares in 2009 and definitely wants to be a listed entity by 2010.
While listed media firms have lost significant ground in the current market correction, private deals still seem to value the sector highly.
Mint’s publisher HT Media Ltd also publishes Hindustan, which competes with Amar Ujala in several markets.