NDTV, Turner ink deal for Imagine stake

NDTV, Turner ink deal for Imagine stake

New Delhi: Broadcaster New Delhi Television Ltd (NDTV) said on Tuesday it had signed a deal with Turner Asia Pacific Ventures Inc., a Time Warner Inc. company, to sell a 76% indirect stake in entertainment channel NDTV Imagine Ltd for $67 million (around Rs313 crore).

The stake is held by its unit NDTV Networks Plc. The agreement also involves the issue of fresh equity shares worth $50 million to Turner, taking the size of the deal to $117 million.

NDTV Networks originally held 82.05% in NDTV Imagine, with film-maker Karan Johar and NDTV Imagine chief executive (CEO) Sameer Nair holding 15%, and the remainder divided among NDTV management.

NDTV Networks CEO Vikram Chandra told Mint that though the deal had been signed, it needed approvals from the Time Warner board and regulatory authorities in India.

“Turner International has signed an agreement in principle to acquire 92% of NDTV Imagine, subject to regulatory and Time Warner board approval," Turner International India Pvt. Ltd’s managing director Anshuman Misra said.

Misra did not say if Turner had bought stakes from Nair and Johar. Nair did not respond to attempts to reach him. People close to the development said part of the shares held by individuals in NDTV Imagine were being bought.

Chandra said with the Turner deal, the restructuring of NDTV Networks’ business was complete. “In the last two months, we have successfully concluded a four-part restructuring. Once concluded, the transactions will leave the NDTV group debt-free and cash surplus on a consolidated basis."

Soon after buying back a 26% stake in NDTV Networks from NBC Universal Inc. at a profit, NDTV sold a 69% stake in NDTV Lifestyle Ltd to Scripps Networks Interactive Inc. in a $55 million deal, which implied a value of $79 million for the entity. The deal will be completed in the first quarter of 2010 and NDTV will continue to hold a 31% stake in NDTV Lifestyle.

NDTV has also bought back an outstanding $100 million of foreign currency convertible bonds for $72.40 million. “These were an overhang on the stock," said Ritwik Rai, a research analyst at equity research firm MF Global Sify Securities India Pvt. Ltd. The buy-back was financed through bank loans.

According to Rai, the firm is looking healthier as it can now move on without worrying too much about capital. “It has reduced its risk and level of debt. It can now focus on the news business where it has proven capability and a lot of future, especially in the English news genre."