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Grapevine: RIL calls off Viacom18-Sony merger; ESR eyes Embassy Industrial Parks
Photo Credit: VCCircle

Following a strategic rethink, Viacom18 Media’s indirect majority shareholder Reliance Industries Ltd (RIL) has called off the proposed merger of the company with entertainment businesses of Sony Pictures Networks India (SPN).

RIL has decided to retain a majority stake and management control in Viacom18 through Network18 and wants to invest and grow the digital media business, people familiar with the matter told The Economic Times

Several content and production houses are keen to partner with RIL and Jio, they added.

“With Jio’s unprecedented growth, the group feels content will play a major role in the future and wants to keep control,” one of them said.

Meanwhile, GAIL is in preliminary talks with beleaguered infrastructure financier IL&FS and US-based infrastructure investment fund Global Infrastructure Partners (GIP) to pick up at least 49% stake in ONGC Tripura Power Company (OTPC) at a valuation of Rs 1,500 crore ($205 million), two people aware of the development told The Economic Times.

IL&FS holds 26% in the power plant, while GIP has a 23.5% stake. The remaining 0.5% is owned by the Tripura state government. If successful, GAIL would have the rights equal to Oil and Natural Gas Corporation (ONGC), which is the 50% owner.

National Investment and Infrastructure Fund (NIIF) is said to have also shown interest in buying the stake previously.

“The final bids are expected in November, after which it will be taken up with the Committee of Creditors for approval,” an official in the know of the transaction said.

In another development, realty firm Embassy Group is looking to sell its warehousing and industrial business, Embassy Industrial Parks (EIP), to logistics fund ESR for more than Rs 900 crore ($123 million), three people with direct knowledge of the development told The Economic Times

The deal will see Bengaluru-based Embassy Group exiting the warehousing business completely.

Prior to this, EIP was in talks with IndoSpace. 

“The deal is expected to be concluded by the end of this year. Embassy is looking to monetise the completed and under-construction assets of the platform,” said one of the people.

In 2015, Embassy-Warburg Pincus jointly formed EIP. Warburg now owns 70% stake in EIP, while Embassy Group holds the rest.

“The Embassy group wants to exit the warehousing business and focus on commercial and residential," said another person.

Also, Tata Sons, which owns 51% in budget carrier AirAsia India, is in discussions to buy out the remaining 49% held by its Malaysian partner after its reluctance to inject fresh equity in the JV, a person in the know told The Times of India.

Tata Sons has the first right of refusal for the minority stake owned by AirAsia in the India venture.

AirAsia plans to raise $600 million (Rs 4,392 crore) through debt and equity to weather the pandemic. “AirAsia Malaysia, due to its financial difficulties, is not keen on infusing capital into the Indian JV. Tata Sons is forced to consider buying out AirAsia,” said the person.

Tata Sons in its 2019-20 report said that the airline’s net worth was completely eroded and its auditor voiced worry about the JV’s ability to continue as a going concern since its total liabilities exceeded the total assets.

According to the current agreement between the two partners, Tata Sons cannot invest more than 10% in another budget airline without its partner’s approval. Tata has already shown interest in buying out Air India Express.

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