HYDERABAD: The Ushodaya Enterprises Limited (UEL), a leading Indian media company based here, on Sunday announced that its Board of Directors had approved an agreement with the Blackstone Group wherein the latter and its affiliates would acquire a stake in it. The Blackstone Group would also get representation on the UEL Board.

As part of this transaction, UEL expects to raise $465 million comprising a $275 million investment by Blackstone and $190 million of bank financing. Other terms of the deal were not disclosed. The transaction is subject to regulatory approval by the Foreign Investment Promotion Board and the Ministry of Information and Broadcasting. Kotak Investment Banking acted as the sole investment banking adviser to the transaction, according to a press release from the UEL.

The UEL owns the third largest newspaper, Eenadu, and the fourth largest private television broadcasting network in the country, while the New York-based Blackstone Group is a global private investment and advisory firm founded in 1985.

Reacting to the development, Ramoji Rao, UEL chairman, said: "We were impressed with Blackstone's disciplined and highly rigorous investment process and the ability to combine this emphasis with a deep and genuine respect for the promoter's interests."

He said the company had access to several financing options, including an IPO. "But we decided to go with Blackstone because we believe that at this stage of our growth we have an opportunity to create significant value by leveraging Blackstone's outstanding experience and track record in the global media sector."

Akhil Gupta, chairman and managing director of Blackstone Advisors India Private Limited, said: "We believe that the Indian media sector will be a key beneficiary of a secular trend in growth in personal consumption that is driving India's economic expansion."

This in turn would spur advertising growth and the UEL would be an ideal platform for Blackstone to play on this highly attractive sector in India, he added.

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