Group has parted ways with television content production company Balaji Telefilms. A few days ago, the STAR Group, Balaji Telefilms Ltd (BTL) and BTL's promoters entered into an agreement whereby the parties involved agreed to "terminate the agreements entered into between them, inter se, dated August 18, 2004, in the manner specified in the Agreement".
As part of this disengagement, the agreements entered into between BTL and STAR in April 2007, relating to the regional languages joint venture, will also be terminated. The termination will leave both STAR and BTL free from their respective rights and obligations under the agreements.
Pursuant to the agreement, the promoters of BTL are "entitled to purchase, either on their own account and/ or through a third party (ies) nominated by them, the shareholding held by STAR (through its group entity, Asian Broadcasting FZ-LLC, 'ABF') in BTL for an aggregate price of Rs 190 per share". It maybe recalled that ABF had acquired a 25.99 per cent equity interest in BTL in August 2004.
The relationship between STAR and BTL as broadcaster and content provider will not be affected and both parties are keen on continuing that link. The content supply agreements between the two for various shows produced by Balaji will be modified to remove the restrictions imposed upon BTL relating to exclusivity on certain primetime slots.
Commenting on the agreement in an official communique, Uday Shankar, chief executive officer, STAR India, says, "The relationship between STAR and BTL as broadcaster and content provider will not be affected. The new arrangement allows both parties to take the best advantage of emerging opportunities in broadcasting and content creation." BMR Advisors acted as STAR's exclusive transaction advisor.
Through an official communiqué, Shobha Kapoor, managing director, BTL, said, "STAR and BTL have had a successful relationship over the past few years, one that has been to the mutual benefit of both. This agreement with STAR releases BTL from its various obligations and opens up very exciting opportunities for it."
Kapoor added that Balaji Telefilms hopes to be able to cater to the wider needs of the high-growth Indian broadcasting industry. "Further, we are also exploring strategic initiatives in various other segments of the Indian media and entertainment industry," she added. Ambit Corporate Finance acted as BTL's exclusive financial advisor for this transaction.