The Walt Disney Company (TWDC) will hike its stake in UTV Global Broadcasting Limited (UGBL), which is a 75% subsidiary of the company, by 10%. TWDC will buy 10% additional equity from Unilazer Exports and Management Consultants Limited for Rs 32.97 crore. The board, in its meeting held yesterday, approved the transaction after reviewing the valuation report presented by Ernst and Young.
Also, UTV software communications, in which TWDC holds a majority stake, proposed to increase its stake in the Indian Special Purpose Vehicle (SPV) company that controls the English business news channel UTVi to 49%. Ronnie Screwvala and his affiliates would hold 51% stake in the SPV as the founder promoters of the business news channel. Currently TWDC holds a 20% stake in the SPV and the remaining 80% stake is held by Screwvala and associates.
The board is yet to consider the investment proposal and has ordered an immediate independent valuation of the business news channel, to be submitted to the board within 4 weeks.
TWDC currently holds 59.9% stake in UTV Software Communications, while Ronnie Screwvala holds a 23% stake in it. Since TWDC holds a majority stake in the company, it is considered as a foreign company under the pre-2009 guidelines.
UBGL may also soon hit the markets for raising additional funds as the board also discussed raising funds by bringing in an additional partner. The board observed that though currently there isn’t any immediate funding requirement, it should continue to examine the prospects of investments in the company.