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DEN Networks sells another 25% stake in Delhi Dynamos to ship recycling group GMS

16 November, 2016

Goldman Sachs-backed cable television distribution company, DEN Networks Ltd has sold an additional 25% stake in the Indian Super League (ISL) football club Delhi Dynamos to Wall Street Investments Ltd, it said on Wednesday.

In a stock exchange filing, it said Wall Street Investments has bought the additional stake in DEN Sports & Entertainment Pvt. Ltd from DEN Networks. DEN Sports, in turn, owns DEN Soccer Pvt. Ltd that houses Delhi Dynamos.

It did not give details on the value of the deal but added that DEN Sports will be renamed as Delhi Sports & Entertainment Pvt. Ltd while DEN Soccer will be rechristened as Delhi Soccer Pvt. Ltd.

Last year, Wall Street had picked 55% stake in the soccer club for Rs 43.32 crore in a deal that valued the firm at Rs 78.7 crore. That transaction involved some share sale by DEN Networks and a preferential allotment of shares to Wall Street. If the latest deal is struck at the same or higher valuation, it could be worth Rs 20 crore or more.

The digital cable and broadband company was looking to divest stake in the football club business for quite some time, to focus on its core business.

DEN Networks has a geographical presence in 13 states, including Delhi, Uttar Pradesh, Karnataka, Maharashtra, Gujarat, Rajasthan, Haryana, Kerala, West Bengal, Jharkhand and Bihar.  Goldman Sachs PE, which initially invested $110 million in 2011 in DEN Networks, acquired additional preference shares in September 2016.

Delhi Dynamos churned out revenues of Rs 24 crore with an operating loss of Rs 34 crore for the year ended 31 March 2016. In the previous year, it had revenues of Rs 8 crore with loss of around Rs 46 crore.

It is one of the eight teams participating in the Indian Super League, which was launched in October 2013 by Reliance Industries Ltd, IMG Worldwide and Star India Pvt. Ltd along the lines of the cricket league, Indian Premier League.

Star India is part of 21st Century Fox, a media & entertainment firm controlled by Rupert Murdoch. Murdoch also controls News Corp, the parent of this website.

Shipping to soccer

Wall Street Investments represents promoters of GMS, a US- and Dubai-based business group with interests in the shipping industry.

Founded by NRI Anil Sharma, GMS claims to be the world’s-largest cash buyer of ships for recycling, with offices in Hamburg, Dubai, Singapore, Shanghai and Tokyo besides representatives in all major recycling locations, including India.

Alang, in Gujarat, is the world’s-largest ship recycling yard.

GMS has a division called GMS Capital which specialises in corporate acquisitions, mergers, new buildings and second-hand purchases, and tends to target deals that are either too small for larger PE funds to consider (in the $3-20 million range) or transactions that complement the firm’s core business.

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DEN Networks sells another 25% stake in Delhi Dynamos to ship recycling group GMS

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