Media and entertainment group Network 18 is restructuring its businesses that would see consolidation of operations under two buckets broadcasting and publishing. Under the corporate move that would simplify the business holding structure for the shareholders,
Network 18 plans to transfer its broadcast business to IBN18 and the new entity will be named TV18.
The new Network18 will have a controlling stake in new TV18 and will operate the digital, publishing, sports and event management businesses and will also hold all group investments in HomeShop 18, Newswire 18, DEN, Yatra and Capital 18. All its broadcast businesses — including CNBC-TV18, CNN-IBN, IBN7, CNBC-Awaaz and the group’s 50% stake in Colors, MTV, Nick, VH1 and IBN Lokmat — will get consolidated under IBN18 (or the new TV18).
Shareholders of existing TV18 will get 68 shares of IBN18 and 13 shares of Network18 for every 100 held while Infomedia18 shareholders will get 14 additional shares of Network18. Both TV18 and Infomedia18 will cease to exist post the restructuring in which BMR Advisors acted as the sole transaction and financial advisors.
The restructuring will allow shareholders to remain invested in all the groups businesses or choose investments in separate businesses that are currently intertwined with loss making operations.
However, investors apparently were not enthused by the share swap ratio with all the group firms seeing sharp drop in prices on Thursday. Network18 scrip dropped 14.5%, TV18 fell 12%, Infomedia18 declined 8.5% and IBN18 dropped 3.6% over the closing price on Wednesday.
BMR Advisors acted as the sole transaction and financial advisors to the restructuring.