Reliance Industries (RIL) on Thursday said it will acquire control of listed media and entertainment companies Network18 Media and Investments and TV18 Broadcast from journalist-turned-entrepreneur Raghav Bahl, the current promoter of these firms who is all set to exit the companies he founded.
Three people with knowledge of the matter confirmed the development. None of them wanted to be identified. This will be the oil-to-yarn and retail conglomerateís first direct exposure to the media industry.
After RIL comes to the forefront vis-ŗ-vis management of the TV18 Group, it is expected to put in new editorial and business teams in place to replace the existing ones, these sources said.
Not surprisingly, on Wednesday, Network18 announced to the bourses that its chief executive B Sai Kumar had quit. On Thursday, TV18 said in a company filing that RDS Bawa, chief financial officer of the Network18 Group, had quit as well.
It is expected that Bahl, who is managing director of Network18, will follow suit soon, along with senior journalists, one of the persons said. Rajdeep Sardesai, editor in chief of IBN18, which includes news channels CNN-IBN (English), IBN 7 (Hindi) and IBN Lokmat (Marathi), is expected to go on a three-month sabbatical soon.
It isnít immediately clear why RIL has chosen to take direct control of Network18 and TV18, barely two years after it made the original investment, when it had a window of 10 years to do so.
According to one of the persons familiar with the development, the decision to take management control of the two media companies could have been motivated by certain differences between Bahl and RIL with regards to management of operations.
Emails sent to Bahl and RIL on Thursday didnít elicit any response.
In 2012, RIL ó through an entity called Independent Media Trust (IMT) ó had invested around Rs 2,200 crore in 10-year, zero-coupon optionally convertible debentures in six holding firms promoted by Bahl. These debentures could be converted into equity shares of these companies any time at RILís call in the next 10 years from the date of such investment.
The Mukesh Ambani-led conglomerate is going to convert at least a part of the debentures it holds in Bahlís holding companies over the next few days, these sources said. Upon such conversion, RIL will gain majority shareholding in these firms and, thus, control over Network18 and TV18 (Network18 is the principal holding company of TV18).