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HT Media hives off its Hindi news business

By afaqs! news bureau , afaqs!, New Delhi | In Media Publishing | November 18, 2009
As part of this, Hindustan, the Hindi newspaper, will come under Hindustan Media Ventures

HT Media has hived off its Hindi news business, which will now come under the subsidiary, Hindustan Media Ventures. The new arrangement will come into effect from December 1.

As per the de-merger, HT Media is offloading its Hindi daily, Hindustan, along with two Hindi magazines, Nandan and Kadambini, to Hindustan Media Ventures, which is not a listed company. The hive-off will also include the web portals of the three brands.

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The arrangement will also take into account the assets, liabilities and employees of the Hindi Business Undertaking, which includes Hindustan, Nandan, Kadambini and their respective portals. The arrangement has been done on a slump sale and going concern basis.

Piyush Gupta, chief financial officer, HT Media says, "The board has taken this de-merger on record. We have been toying with this idea for many years now, but the recent market response and conditions have been in favour of Hindi media. It has surprised us positively and that's why we decided to bring in renewed focus to the business."

He adds, "Hindi, as a business, is very different from English; and to capture the real value of the business, the de-merger decision was taken."

The Hindi business of the group contributes to a third of the total revenue of all the publications by HT Media. The group's vernacular business has witnessed growth of 25-30 per cent; Gupta adds that the company expects the number to swell further.

Talking about future plans of the Hindi news business, he says that the company will work on strengthening its offerings in Bihar, Jharkhand and Uttar Pradesh.

HT Media approved the sale or transfer of the Hindi Business Undertaking on the book value, as on November 30, 2009, for a lump-sum cash consideration of Rs 149 crore, including networking capital of Rs 24 crore. However, the company has informed BSE that the networking capital will be adjusted and transferred as per actual books of accounts, to be certified by the statutory auditors, as on November 30.

It is learnt that the group decided to separate its English and Hindi businesses, because the vernacular business has been performing better than the former in the English-speaking markets.

For the record, HT Media owns the English newspaper, Hindustan Times and the financial daily, Mint. The company also has four FM radio stations and a job portal.