Cable Video merges with CVO Holdings in consolidation move

Sibabrata Das in Mumbai

Cable Video (India) Ltd has been merged with the parent company, CVO Holdings, as part of Hinduja Group’s strategy to reduce the number of subsidiaries under Hinduja TMT. The swap ratio for the merger is 1:1.

“The plan is to have one company and subsequently go in for an initial public offering (IPO). We had filed a petition with the Mumbai High Court for the merger. We have received the final order from the court,” said Hinduja TMT vice chairman Solomon Raj.

The merged entity, however, will be renamed Cable Video (India) Ltd. “We had formed CVO Holdings for strategic reasons when we had satellite plans. We have put those off for now. We have decided to go back to the original arrangement and name,” said company chief executive officer Ravi Mansukhani.

CVO Holdings recently bought out Oxygen, an interactive music channel. The plan is to launch a few thematic channels, which would be offered as a package with Internet through a group company, IndusInd Media & Communications. “We are planning expansion on the ground and not on the satellite at the moment,” said Mr Mansukhani.

The plan to raise funds through an IPO has also been deferred. The process of renaming the merged entity is on. “CVIL is an established brand. If we were to use CVO Holdings, it would have caused us several inconveniences. We would have had to change letterheads and billings. We decided to go back to the CVIL name,” said Mr Mansukhani.

Earlier, the Hindujas owned a 51 per cent stake in CVIL, while the balance was held by the promoters of video cassette distribution companies Bombino, Indus and Time. CVIL ran the CVO cable movie channel and owned the brand Cable Master, which licensed movies to cable operators.

Swayed by the convergence economy, the Hindujas changed their plans for CVIL. Hinduja TMT took a 51 per cent stake in CVIL via CVO Holdings. The balance 49 per cent was with the Time, Indus and Bombino promoters. Incidentally, the Hindujas had changed the name of Sezar Housing and Infrastructural Private Ltd to CVO Holdings by applying to the registrar of companies, Maharashtra.

In the merged entity, the shareholding pattern will remain the same. Hinduja TMT will continue to hold 51 per cent and the balance will be with the other partners. The focus of CVIL will be on increasing ad and subscription revenues from the cable movie channel, CVO. The revenues for the CVO channel were affected in the last financial year. Income from licensing of movies to cable operators was also under squeeze because of competition from alternate cable movie channels.