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RIL to fund N18 & TV18's ETV Channels acquisition
Under the given agreement, Infotel Broad Band Services Limited ("Infotel"), a subsidiary of RIL, has entered into a Memorandum of Understanding (MoU) with TV18 and Network18 Media and Investments Limited (Network18) for preferential access to all their content for distribution through the 4G Broadband Network that is being set up by RIL.
Reliance Industries Limited has announced that a part of the interest owned by it in the ETV Channels is being divested to TV18 Broadcast Limited (TV18).
It is pertinent to note that Infotel is setting up a pan India 4th generation broadband network. With this, Infotel intends to take a leadership position in content distribution through broadband technology through a host of devices. Digital content ranging from entertainment, news, sports, music, weather, education and other genres will be a key driver to increase consumption of broadband.
As per the MoU, Infotel shall have preferential access to - the content of all the media and web properties of Network 18 and its associates; and programming and digital content of all the broadcasting channels of TV18 and its associates on a first right basis as a most preferred customer.
RIL, through investments of about Rs 2,600 crores by its group companies, currently holds interest in various ETV channels that is being operated and managed by the Eenadu Group. This includes a 100 per cent economic interest in regional news channels, namely ETV Uttar Pradesh, ETV Madhya Pradesh, ETV Rajasthan, ETV Bihar and ETV Urdu channel, a 100 per cent economic interest in the entertainment channels namely ETV Marathi, ETV Kannada, ETV Bangla, ETV Gujarati and ETV Oriya and 49 per cent economic interest in ETV Telugu and ETV Telugu News.
Meanwhile, both Network18 and TV18 are raising funds for the acquisition of ETV channels through a rights issue.
Independent Media Trust ("Trust"), a trust set up for the benefit of Reliance Industries Limited, has agreed to fund the Promoters of Network 18 and TV18 to enable them to subscribe to the proposed Rights Issue.
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 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," the company said.
Raghav Bahl, founder, controlling shareholder and managing director of Network 18, along with his team will continue to have full operational and management control of both the companies. Bahl and the current promoter entities of Network18 and TV18 will continue to retain control over Network 18 and TV18.
The investments in these media properties are being made by RIL through an independent trust which will have eminent individuals as Trustees, thus preserving the management, operational and editorial independence of these media companies, the company noted.
The investment by the Trust in the Promoter Companies of Network18 and TV18, and the arrangement between Network18/TV18 and Infotel for the acquisition and distribution of content on the Infotel platform, is one of many such partnership initiatives being undertaken by Infotel.
"The combination of India's leading TV content provider, with a bouquet of nearly 25 channels, and Infotel, will be a significant step in bringing a high quality "live TV" experience to broadband customers across the country. Likewise, Network18's market-leading web portals and e-commerce operations will provide several value added services to Infotel's broadband subscribers. This unique alliance is expected to differentiate Infotel and create value for all stakeholders," Reliance said.