Media group New Delhi Television Ltd (NDTV) and Kasturi and Sons Ltd (publisher of The Hindu newspaper) are selling their two-year-old joint venture Metronation Chennai Television Ltd that runs the city-based English news channel, to Educational Trustee Company Pvt Ltd, for Rs 15 crore.
NDTV, which operates several news and infotainment channels such as NDTV 24X7, NDTV India, NDTV Profit and NDTV Good Times, owns 51 per cent stake in the venture, with the remaining 49 per cent lying with Kasturi and Sons. Kasturi and Sons owns a number of publications such as The Hindu, The Hindu Business Line, The Sportstar and Frontline.
Educational Trustee Company is also a media group that runs the leading Tamil daily Dina Thanthi. The group is led by B Sivanthi Adityan.
This leads to a quick end to the JV that has been bleeding financially since it was launched at the time when the media ad market went downhill due to economic slowdown.
As per NDTV disclosures, Metronation Chennai, set up with a capital of Rs 10.2 crore, reported a turnover of Rs 1.2 crore with net loss of Rs 17.94 crore in the last financial year.
At mid-day, NDTV shares were trading at Rs 50.5 per unit, up 1.4 per cent on the Bombay Stock Exchange in a strong Mumbai market.
NDTV had been looking for strategic partners for the venture for some time now and the NDTV Group’s top executive KVL Narayan Rao had said earlier this year that it was looking to ramp up Tamil content on the channel.
The sale of Metronation Chennai comes as yet another asset liquidation for NDTV that has struck a string of business sale deals in the recent past.
Last year, the company inked a strategic alliance with Malaysian media group Astro All Asia Networks Plc. (Astro) for its lifestyle channels in India. Under the alliance, South Asia Creative Assets Ltd (a subsidiary of Astro) acquired 49 per cent stake in NDTV Lifestyle Holdings Pvt Ltd in two tranches for $40 million (Rs 185 crore), valuing the firm at around Rs 375 crore.
In December 2009, NDTV sold 92 per cent stake in NDTV Imagine to Time Warner Inc. for $126.5 million. The transaction included a secondary purchase of 87.4 per cent stake in Imagine from NDTV Networks Plc., a subsidiary of NDTV Imagine Ltd, and another minority shareholder.
NDTV had also struck a deal with US-based Scripps Networks for selling 69 per cent stake in NDTV’s lifestyle network – NDTV Lifestyle – in a $55 million deal. However, the transaction, which valued NDTV Lifestyle at more than $79 million, did not go through and was scrapped in May 2010.