MUMBAI: CNN-IBN, the TV18 Broadcast owned English news channel, has appointed Vishal Bhatnagar as National Revenue Head, with immediate effect. He was earlier SVP & Regional Head-North & East, CNBC-TV18 and CNBC Awaaz.

The move is a part of the leadership re-alignment now underway at Network18 News Media, the client facing ad sales unit, which manages the advertising interests of the news and factual entertainment channels at Network18 Group.

As is known, Network18 News Media spearheads the group‘s effort towards consolidating and optimising revenue growth across its six news & factual entertainment channels (CNBC-TV18, CNBC Awaaz, CNN-IBN, IBN7, IBN-Lokmat and History TV18) spanning the full spectrum of general news, business news, regional news and factual entertainment.

Ad sales for the ETV regional news network, subject to regulatory approvals for the acquisition, will also form part of this stable. While acting as a centralised sales agency, Network18 News Media also reflects the group‘s focus on individual brands via dedicated teams and revenue leaders aligned to each channel.

Commenting on the larger re-alignment, Network18 News Media CEO Sanjay Duasaid, "We believe that our brands are well-placed to build further on their leadership, both in terms of innovative client solutions as well as a strong network proposition. Each of our leaders has a proven track record and strong leadership acumen and we‘re confident that this alignment is the beginning of a new phase of growth for us."

Bhatnagar brings with him over 18 years of rich experience in sales across media and has been with the Network18 Group since 2004. He holds degrees in management and commerce from the International Management Institute (IMI) and the University of Delhi.

MUMBAI: Clouded with a steep valuation over the acquisition of Eenadu TV?s partial assets, the rescue act of Mukesh Ambani has failed to considerably enthuse investors after the Raghav Bahl-promoted Network18 Media and TV18 Broadcast got a first-day lift following the announcement of the deal.

The positives in the form of cleaning up debt, getting the backing of India?s leading business house Reliance Industries Ltd (RIL) and possible gains in subscription revenues with the inclusion of regional broadcasting firm ETV were negated by the lack of disclosure in how much indirect stake RIL will have in the listed entities and what terms the OCDs (Optionally Convertible Debentures) would have.

The lack of interest and somewhat rejection from shareholders and investors is evident from the fact that in the last two days, shares of TV18 fell over 8.6 per cent, after breaching the upper circuit on 3 January.

Network18 scrip, which touched a high of Rs 55.5 per share on 4 January, has come down to Rs 49.7 per share on the last closing day at the BSE.

Financial analysts told Indiantelevision.com that the jump was an aberration and in the short term, the stock may start to drag.

In the first two days (3, 4 January), the stock price of Network18 and TV18 companies had gone up 37 per cent and 30 per cent respectively, before the reality sunk in and the scrips started falling on Thursday.

As of Friday, TV18 scrip closed at Rs 30.80, while Network18 closed at Rs 49.70. Incidentally, the rights issue price of TV18, which is to be not more than Rs 40 per equity share and Network18 (not more than Rs 60 per equity share), is more than the current stock price.

The market cap of minority shareholders of the two companies ? TV18 and Network18 - is Rs around 8.3 billion (as of 4 January?s closing price). This provides a disincentive to them to subscribe to the rights issues of the two entities where they will have to possibly cough out Rs 23 billion.

?If the minority shareholders do not subscribe to the rights issues of the two companies, the promoter stake will be pretty high. We could even see a delisting if the promoter holding goes up to very high levels,? said a media analyst at a local broking firm who did not want his name to be revealed.

A different perspective, not widely accepted, was offered by a stock broker. "The best time to collect the shares of TV18 and Network18 would be to wait till their financial performance improves. Also, a good time could be when the rights issue is on the way so that the trend would be captured," he said.

The other media stocks also rose briefly due to the immediate impact of the deal. Almost all listed media entities saw a northward trend in their stock price on the day when the deal was announced (3 January).

Among the players in the news business, TV Today Network closed 16.36 per cent higher on 3 January compared to its previous close. Other players like NDTV (14.29 per cent) and Zee News (5.64 per cent) also closed on a high.

Shares of Sun TV (2.51 per cent), UTV Software Communications (1.2 per cent), Zee Entertainment Enterprises Ltd (0.9 per cent), and Reliance Broadcast Network (0.1 per cent) marginally jumped.

"The media industry has its own set of challenges. Media stocks momentarily went up because of Mukesh Ambani making his big bang entry into the media sector. That euphoria has died down. The sector has to focus on profitability before it regains its old valuations," a market analyst said.

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MUMBAI: In a swift move, India?s richest man Mukesh Ambani marks his entry into the media business.

Ambani-led Reliance Industries (RIL) said Tuesday it will invest in Raghav Bahl-promoted Network18 Media & Investments and TV18 Broadcast through an Independent Media Trust.

As per the deal, the subsidiary will fund promoter entities of the TV18 group to subscribe to rights issues. In return, it will get access to content from TV18 group for its 4G broadband network that Reliance is all set to roll out this year.

Bahl will continue to retain management and 51 per cent control over the two media entities.

Meanwhile, boards of both -- Network18 and TV18 -- have approved rights issue of Rs 27 billion each. TV18 Rights Issue proceeds, at a price of not more than Rs 40 per equity share, will be utilised to repay the existing debt, fund the acquisition of ETV Channels and fund working capital needs.

Meanwhile, Network18 rights issue proceeds, at a price not more than Rs 60 per equity share, will be utilised to repay the existing debt and subscribe to the Rs 14 billion of the rights Issue of TV18.

The net aggregate rights issue of both Network18 and TV18 will result in a fund raising of Rs 40 billion.

The current promoter entities of Network18 will acquire shares worth Rs 17 billion of this rights issue, for which they have entered into an arrangement with RIL?s trust.

"The promoter companies of Network18 and TV18 and the Trust have entered into a Term Sheet under which the Trust would be subscribing to the Optionally Convertible Debentures (OCDs) to be issued by the Promoter Companies. Reliance will leverage its deep understanding of the Indian markets?consumer insights, technological expertise, and the ability to build and manage scale?to make this a "win-win" partnership. This will create value and be accretive to the shareholders of RIL," RIL said in a press release.

Meanwhile, TV18 will acquire the TV business of the Eenadu Group.

The TV18 board announced that the company plans to attain 100 per cent interest in regional news channels in Hindi namely ETV Uttar Pradesh, ETV Madhya Pradesh, ETV Rajasthan and ETV Bihar and ETV Urdu channel, 50 per cent interest in ETV Marathi, ETV Kannada, ETV Bangla, ETV Gujarati and ETV Oriya and 24.50 per cent interest in ETV Telugu and ETV Telugu News.

TV18 will have board and management control of ETV news channels and ETV non Telugu GEC channels. The board has approved an outlay of up to Rs 21 billion for the acquisition.

TV18 also has an option to buy the balance 50 per cent interest in ETV non Telugu GEC channels and additional 24.50 per cent interest of ETV Telugu Channels.

Ernst & Young (E&Y) acted as advisors for financial and tax due diligence and valuation of the assets. The legal due diligence was carried out by Khaitan & Co, TV18 said.

After the deal, on a combined basis, TV18 will be offering a mix of national and regional channels catering to diverse genres like Hindi and regional entertainment; general news in English, Hindi and regional languages; business news in Hindi, English and regional languages; music; kids; devotional and infotainment channels.

As a part of the deal for acquisition of ETV Channels, Network18 and TV18 have also entered into a Memorandum of Understanding with Infotel Broadband Services Limited (?Infotel?), a subsidiary of RIL. Under this agreement, the companies and their associates will have the right to distribute the content of all the media and web properties of Network18 and programming and digital content of all the broadcasting channels through 4th Generation Broadband Network of Infotel. Infotel shall have preferential access to this content on a first right basis as a most preferred customer.

Network18 founder, editor and MD Raghav Bahl said, ?This is a truly seminal moment in the 18-year-old history of Network18/TV18. By inducting such a significant amount of equity, our Balance Sheets will become among the strongest in the industry. Also, by acquiring this strategic control over several ETV Channels, TV18 will have a bouquet of leading television channels. Riding on the imminent digital wave, I am convinced that this acquisition is a significant move which will catapult TV18 into the forefront of India?s broadcasting industry.?

"Further, on a debt free basis, both Network18 and TV18 hope to strengthen their position in various media segments like news and entertainment broadcasting, consumer internet, digital and print publications, filmed entertainment, home-shopping, e-commerce and other emerging businesses."

On the news, both Network18 and TV18 stocks ralled and hit the upper circuit in the early hours of trading on the BSE. While Network18 scrip closed at Rs 46.4 per share, TV18 closed at Rs 33.70 per share on Tuesday.

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MUMBAI: The market is speculating Mukesh Ambani?s Reliance Industries to invest in Network18 Group to fund the acquisition of regional television broadcaster ETV. The investment is likely to be made through a subsidiary.

The value of the ETV deal is pegged at around Rs 25 billion. Though TV18 and Network18 have proposed rights issue, the acquisition price of ETV is too high and needs external support.

When contacted, Network18 chief executive officer B Sai Kumar declined to comment on the issue. I Venkat, director on the Eenadu board, said he was not aware of the development.

A formal announcement is expected Tuesday.

Network18 and TV18 founder-promoter Raghav Bahl needs to reduce debt that remains high. The acquisition of ETV will help TV18 to increase its subscription revenues.

Shares of TV18 Broadcast rose 5.75 per cent on the BSE while Network18 was up 6.78 per cent.

RIL will be rolling out its broadband services later this year and needs exclusive content to pump through them.

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