The Hindu : Business : Disney arm to invest Rs. 800 cr. in UTV

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Tuesday, Feb 19, 2008
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Disney arm to invest Rs. 800 cr. in UTV

Special Correspondent

TWDC and UTV to acquire 15 per cent stake in UTV Global Broadcasting for Rs. 119 crore

Total deal size is Rs. 1,314 crore
UTV to invest
Rs. 240 cr. in
UTV Global

— PHOTO: SHASHI ASHIWAL

big plans: Ronnie Screwvala, founder promoter and Group CEO, UTV, addressing a press conference in Mumbai on Monday.

MUMBAI: In a significant move for the Indian entertainment industry, The Walt Disney Company (Southeast Asia) Pte Ltd. (TWDC), a subsidiary of The Walt Disney Company, is to invest around Rs. 805 crore ($203 million) into UTV Software Communications Ltd. (UTV).

Simultaneously, TWDC will invest with UTV in UTV Global Broadcasting Ltd. (UGBL) by acquiring a 15 per cent stake worth Rs. 119 crore ($30 milllion).

TWDC’s investments in UTV and UGBL, together with the warrants to be issued to Ronnie Screwvala’s promoter group, of Rs. 390 crore after exercise, makes the total deal size of about Rs. 1,314 crore ($330 million).

The transaction will be done through a preferential allotment to TWDC and the promoters as per the Securities and Exchange Board of India (SEBI) regulations and will require a public announcement to all UTV shareholders. The investment and the subsequent open offer are subject to shareholder and regulatory approvals.

According to a company statement, the investment further establishes TWDC’s entry into the Indian market and complements the fast-growing Disney-branded businesses and long-held joint venture with ESPN-Star Sports. As a result of this investment, TWDC’s stake in UTV will go up from 13.7 per cent to 32.1 per cent on a fully diluted share capital basis.

The number of shares expected to be issued as part of the transaction is 93.52 lakh at a price of Rs. 860.79.

This is based on the SEBI preferential allotment pricing formula with a 5 per cent premium.

Ronnie Screwvala, the founder promoter and Group CEO of UTV, consolidates promoter’s stake with an issue of 45.32 lakh warrants at the same price as TWDC of Rs. 860.79, investing Rs. 390 crore after exercise.

At the same time, TWDC will invest about Rs. 119 crore ($30 million) for a 15 per cent stake in UGBL. UTV will also invest Rs. 240 crore ($60 million) for a 75 per cent stake in UGBL. The remaining 10 per cent will continue to be held by Ronnie Screwvala’s promoter group.

UGBL is the parent company for its two wholly owned subsidiaries, Genx Entertainment and UTV Entertainment Television Ltd. Genx had already successfully launched two youth entertainment channels through the ‘Bindass’ brand, while UTV Television Entertainment has just launched

The World Movies channel and is about to launch UTV Hindi Movies channel.

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