Network 18 Media plans rights issue of up to 2,700 cr

Network 18 Media plans rights issue of up to 2,700 cr

Mumbai: Network 18 Media & Investments Ltd is planning a rights issue of up to 2,700 crore to finance a similar issue of group firm TV18 Broadcast Ltd and repayment of debts.

Seeking shareholder’s approval of the matter through a postal ballot, the company said its board will decide on a later date the amount and quantum of equity shares of face value 5 to be issued “aggregating an amount not exceeding 2,700 crore, including share premium."

The company’s net debt as on 31 March 2011, as per data on the BSE stood at 1,001 crore. As on 31 March 2010 it was at 860 crore.

The move follows a multi-layered deal worth about 4,000 crore between Reliance Industries and Network 18 earlier this month under which the Mukesh Ambani-led corporate giant would sell a part of its interest in Eenadu TV channels and would also fund rights issues of Network 18 firms.

As part of the deal, Network 18 and TV18 Broadcast would together raise a net amount of 4,000 crore through rights issues (wherein shares are issued to existing shareholders), including about 1,700 crore contribution of promoters.

An independent trust set up by RIL would provide funds to the Network 18 group promoters, in the form of ‘optionally convertible debentures’, for rights issues.

TV18 would spend up to 2,100 crore for acquiring a part of RIL’s stake in ETV assets.

Network 18 Media & Investments further said that along with the Network 18 Group it is in the process of expanding business by pursuing growth opportunities in media and broadcasting with the goal to transform the group into a full-fledged media house.

The group is also looking to expand its bouquet of channels of regional language for which funds are required to be generated, it added.

The company further said it is also seeking approval from the shareholder to increase its authorised capital to 936.5 crore from 531 crore at present.

Moreover, the filing said the company is also asking for shareholders’ nod to increase its borrowing limits to 1,800 crore from the current 1,238 crore.

Shares of Network 18 Media & Investments were trading 3.27% down at 42.95 apiece during late-afternoon on the BSE.