Zee Media Corporation Limited (ZMCL), which houses the Zee group's news and current affairs channels, is set to acquire 49 per cent stake in Big FM, the radio broadcasting business of Reliance Broadcast Network (RBNL), subject to regulatory approvals.
RBNL has 45 FM stations operational and licenses for 14 more. After a mandatory lock-in period of three years, the remaining 51 per cent stake may also change hands.
Alongside, Zee Entertainment Enterprises Limited (ZEEL) has announced that it has agreed to acquire the general entertainment TV channels business from the Anil Ambani-led Reliance Group.
Zee's radio foray
RBNL shall transfer the operational and new licenses into two special purpose vehicles. ZMCL shall acquire 49 per cent stake in both.
ZMCL and RBNL will have the option to acquire/sell the balance 51 per cent after lock-in provisions expire. As per MIB regulations, atleast 51 per cent shareholding needs to be held by the permission holder for a minimum period of three years from the date the channels were operationalised. The lock-in period for the 45 operational licenses shall expire on 31 March 2018, while for the 14 new licenses it will do so three years from the day they become operational. This is expected to happen by March 2020, informed a ZMCL statement.
Rajiv Singh, COO, ZMCL said, “We are pleased to announce this acquisition which shall not only be complementary to our current business but accelerate its growth too. We are currently running successfully a bouquet of 11 news and current affair channels and with the addition of 59 radio licenses, we will be reaching out to a much increased audience base and will keep them engaged on different media platforms. This acquisition shall bring about the desired business diversity and will help in achieving the sound financial objectives at an accelerated pace. We are confident that this investment will enhance value for all stakeholders and looking forward towards this exciting journey to take the company to the next level.”
Sam Ghosh, ED and group CEO, Reliance Capital, said, “We are happy to bring in Zee Media as our partner in the Radio business. This transaction is part of our strategy to reduce exposure in non-core businesses and work towards further reducing debt under Reliance Capital”.
The transaction is expected to close in the first half of 2017, informed a ZMCL statement.
Reliance exits TV business
The board of directors of ZEEL approved this acquisition from Reliance Big Broadcasting, Big Magic and Azalia Broadcast, all part of the Reliance Group helmed by Anil Ambani.
Under these, two operational channels are comedy offering Big Magic and Bhojpuri GEC Big Ganga. The group also has four other licenses.
Punit Goenka, MD and CEO, ZEEL, said, “We are pleased to announce this acquisition which further adds to our expanding universe of general entertainment channels. Big Magic gives us access to comedy genre enhancing our customer offerings. Big Ganga, a leading Bhojpuri channel, syncs with our strategy of expanding into the regional markets which offers attractive growth potential. I am confident that these two channels will make the ZEE network channels more enriching for the audience and for the company.”
Sam Ghosh, ED and group CEO, Reliance Capital, added, “We are happy to divest 100 per cent of our general entertainment TV business to Zee Entertainment. This transaction is part of our strategy to reduce exposure in non-core businesses and work towards further reducing debt under Reliance Capital.”
According to ZEEL, the transaction is expected to close in the second half of 2017.