Sun TV Network Ltd is planning to dilute promoters holding upto a maximum of 4%. It plans to issue 1.57 crore fresh equity shares by way of qualified institutional placement (QIP), FCCB or GDR. The company is expected to go for the same before September 2007, said market sources here.
The issue has been aimed at bringing back the public shareholding in the company to the required level of 10% while augmenting the funding needs as well as meeting the capital expenditure.
As of June 30, 2007, the promoters? shareholding in Sun TV Network has gone up substantially to 93% as against the original 90% due to the composite scheme of amalgamation and arrangement with Gemini TV and Udaya TV with itself, while reducing the public shareholding in the company to below 7%. Sun TV Network has issued 2,96,32,000 equity shares to the promoters of Gemini TV and Udaya TV in the second week of April this year.
The company is expected to choose QIP route to place the additional shares of 1.57 crore and has called for an annual general meeting on August 6, 2007 to seek shareholders approval for the same.
The funds, which will be raised through the fresh issue, will be utilised for expanding its FM radio network across the country. Currently the company has licences for 44 FM radio stations under its subsidiaries including 23 under South Asia FM Ltd and 18 under Kal Radio Ltd. These stations are expected to be rolled out in phases once the necessary infrastructure is in place.
The company believes that radio broadcasting in India has large potential, sustainable and a growing industry, which is its nascent stage.
Given India?s low ad spend to GDP ratio of 0.34% as well as radio?s share of the total ad market at a meagre 3%, the company hopes that the industry has a potential to grow sharply in the years to come.