New Delhi, March 7: Consolidated Press Holdings Ltd (CPH), the holding company of Australian media and entertainment tycoon Kerry Packer, has acquired a 10 per equity stake for $238 million in Himachal Futuristics Communication Ltd. In addition, the company has also formed two joint ventures for software products and e-commerce activities with CPH.The deal was first reported by this newspaper on Tuesday. Describing the move as a strategic alliance, HFCL chairman Mahendra Nahata said, "an additional 10 per cent equity amounting to nearly 72 lakh shares will be issued by HFCL to CPH at a price of Rs 1,450 per share". The HFCL scrip closed at Rs 2,415 on the BSE on Tuesday.
Welcoming CPH to take a seat on the HFCL board, Nahata added that the promoters stake would come down to 40 per cent. CPH with assets of $10 billion, owns the popular Channel 9 television network and the largest magazine business down under. In addition, the company has major investments in mobile telephony, entertainment and e-commerce.
The software products and services joint venture will have HFCL holding 51 per cent, CPH 30 per cent and the remaining earmarked for other strategic investors. The venture will focus on services, product development, IT-enabled services and embedded systems. Initially, an investment of Rs 100 crore will be made in the company with a 1:1 debt-equity ratio.
The e-commerce JV will also have a similar equity structure and Rs 100 crore initial investment. The focus will be on creating and developing network infrastructure, establishing payment gateways to support data and e-commerce services and provide specialized solutions and services for specific business areas.
Nahata said that the JV expects to capitalise on the growing B2B e-commerce market in India taking advantage of the combined strengths of the two companies.
The total investment by CPH will amount to Rs 1,039 crore and is the largest foreign investment being made by any company in India in the telecom sector, claimed Nahata. The proceeds will be used for retiring debt and expansion plans, "We aim to be a zero debt company in the immediate future", Nahata said.
CPH joint CEO James Packer said that the decision to enter the Indian market and the tie-ups with HFCL reflected the belief "that the government of India has a pro-investment approach". Packer added that a lot can be done in India, but hastened to clarify that his company had no immediate plans for any other investment in India or anywhere else.
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