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Private equity fund Blackstone's $275 million investment in the Hyderabad-based media house Eenadu Group is yet to be concluded since the deal has not got approval from the government's Foreign Investment promotion Board (FIPB). Now what is key is the life of the agreement signed between the fund and the company on January 28, 2007, is ending on December 31. The agreement will have to be renewed to stay live.
It's not clear why FIPB has not yet cleared the deal. Foreign investors are allowed up to 26 per cent in newspaper company or news broadcaster. It could be that Ushodaya is in the sensitive media sector, and the government is wary of a foreign investor becoming a significant shareholder in the same. The group owns Andhra's influential Telugu language newspaper, Eenadu, and private television broadcasting network ETV, which runs regional language general entertainment and news channels. Blackstone had signed an agreement in January this year to invest $275 million in Ushodaya Enterprises. The group is also raising $190 million in bank financing. The transaction was subject to regulatory approval by FIPB and Ministry of Information and Broadcasting.