MUMBAI: Cable television service-provider MSO Den Networks has stated that it has received shareholders' nod to demerge its broadband/internet service provider arm Skynet Cable Network. Den Networks, on 11 March 2017, wrote to the National Stock Exchange and the Bombay Stock Exchange Limited about the conclusion of court-convened meeting.
According to a source among Den shareholders, the demerger had been prompted because of adjusted gross revenue (AGR) of eight per cent levied on the broadband business Skynet. Prior to the demerger, this AGR was being levied on Den as a whole whereas it is not applicable to cable TV.
The company had convened a meeting of its shareholders following the orders of the National Company Law Tribunal for this purpose. “The scheme of arrangement has been approved by members of the company,” said Den Network in a regulatory filing signed by company secretary Jatin Mahajan.
In September last year, Den Networks’ board had approved to demerge Skynet Cable Network. It was done to “enhance competitiveness and greater accountability", “achieve structural and operational efficiency”, and to have “a focused attention in the ISP business,” it had said. Its broadband/ISP arm had a turnover of Rs 40.63 crore in FY 2015-16 and contributed 3.53 per cent shares in its total revenue.
In the 11 March 2017 meeting, it stated thus: "This is to inform you that, pursuant to an Order by the Principal Bench of the National Company Law Tribunal ("NCLT"), New Delhi, a Meeting of the Equity Shareholders/Secured Creditors and Unsecured Creditors of DEN Networks Limited ("DEN") has been conducted at PHD Chamber of Commerce, No. 4/2, Sin Institutional Area, August Kranti Marg, New Delhi- 110016 on Saturday, 11th March, 2017, for the purpose of considering and, if thought fit, approving with or without modification(s), the arrangement embodied in the Scheme of Arrangement of DEN or Transferor Company and Skynet Cable Network Private Limited ("SYKNET" or "Resulting Company"), through which Internet Service Provider (ISP) Business / Broadband Undertaking of DEN will demerge into SKYNET, a wholly owned subsidiary of DEN."
