Reliance Industries Ltd (RIL) today announced a consolidation of its media and distribution businesses spread across multiple entities into Network18.
Under the Scheme of Arrangement, TV18 Broadcast, Hathway Cable & Datacom and Den Networks will merge into Network18 Media & Investments. The appointed date for the merger shall be February 1, 2020, the company said.
"The restructuring shall create value-chain integration, and render substantial economies of scale," Network 18 said in a statement to the BSE.
The broadcasting business will be housed in Network18 and the cable and ISP businesses in two separate wholly owned subsidiaries of Network18.
The scheme, the statement said, shall also simplify the corporate structure of the group by reducing the number of listed entities.
"The reorganization furthers the group strategy of building a media powerhouse that is agnostic across pipes, platforms and screens.The aggregation of a content powerhouse across news and entertainment (both linear and digital) and the country’s largest cable distribution network under the same umbrella shall boost efficiency and exploit synergies, creating value for all stakeholders," it said.
According to the share exchange ratio approved by the board, shareholders will get 92 shares of Network18 for every 100 shares of TV18; 78 shares of Network18 for every 100 shares of Hathway and 191 shares of Network18 for every 100 shares of Den.
RIL had in November 2014 taken over Network 18 Media and Investments Ltd through its Independent Media Trust.
Network18 owns TV channels, websites, magazines and general entertainment channel among other businesses. RIL board had approved funding of ₹4,000 crore for taking over Network18.
The statement added that Network18 will be an integrated media and distribution company with a revenue of Rs. 8,000 crore and will be net-debt free at consolidated level.
The company said, consolidation of cable businesses of Den and Hathway in one entity will leverage the combined strength of the 27000 local cable operator partners who act as the touchpoints to 15 million households in India; delivering localized, people-friendly and ultra-fast customer services. The combined Broadband entity will serve 1 mn wireline broadband subscribers across the country.
The scheme of arrangement is subject to all necessary approvals, the company said.