Zee hives off biz into 3 entities

Mumbai, March 29 | Updated: Mar 30 2006, 07:59am hrs
Media major Zee Telefilms Ltd (ZTL) on Wednesday announced a restructuring of its broadcasting businesses to create three independent entities by hiving off its cable distribution arm, Siti Cable (the countrys biggest cable network), its news operations (six existing channels), and its DTH business - Dish TV.

ZTL will be left with TV programming, movies and music comprising non-news businesses like Zee TV, Zee Cinema, Zee Music, Zee Caf, Zee Studio, Zee Sports and fashion channel Trendz.

According to ZTL chairman Subhash Chandra, the companys complex structure needed to be simplified as required by the regulatory environment and market needs. The three new entities will list independently.

The news related business, Zee News, Zee Business and the various language channels will be demerged to form Zee News Limited (ZNL). The cable business, Siti Cable (a 100% subsidiary)and the cable related business will be de-merged into Wire and Wireless (India) Ltd (WWIL), the second new company. WWIL will issue preference shares to ZTL .

The proposal to de-merge the direct to home business DishTV has also met with in principle approval . The management has been authorised to evaluate the proposal. This will create a fourth listed company.

ZTL shareholders will get proportionate shares in ZNL. Based on the valuation and resultant swap ratio, FIIs will be allotted shares in ZNL . If this works out to more than 26%, FIIs will be allotted preference shares of equivalent value on a proportionate basis.