Ace private investor Rakesh Jhunjhunwala has agreed to invest Rs 25 crore (approximately $4 million) in private FM radio company Next Radio Ltd, which runs the radio channel under the brand name Radio One 94.3 FM in seven cities, according to a stock market disclosure.
Next Radio, a subsidiary of media company Next MediaWorks Ltd (formerly known as Mid-Day Multimedia Ltd), is planning to raise Rs 115 crore (about $18 million) through a combination of debt and equity.
The fund would be used for migration of Next Radio's existing licences from phase II to phase III, apart from participation in the upcoming auctions for new FM radio licences to acquire new frequencies.
While it will raise Rs 80 crore (about $12.5 million) in debt, Jhunjhunwala and his associates will put in Rs 25 crore through an issue of equity/convertible preference shares in the company, it said.
It did not say who would bring in the remaining Rs 10 crore.
Next Radio runs Radio One brand FM stations in Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Ahmedabad and Pune.
Next MediaWorks has also reappointed promoter Tarique Ansari as managing director for three more years, subject to approval of the shareholders.
The FM Phase III expansion had got the Cabinet approval earlier this year for the first phase of auctions, which are expected in July and will see 135 frequencies in 69 existing cities.
The new policy allows FM operators to buy second and even third FM radio frequencies in the same market besides looking at M&As. This has opened up the market for consolidation.
Recently, Blackstone-backed Jagran Prakashan acquired Radio City, which has 20 stations in seven states. In another deal Radio Mirchi was to buy Oye FM. However, this has got embroiled in a regulatory tussle.