Scatmag.com

August 2017

RELIANCE BUYS 25% IN BALAJI TELEFILMS


 

Reliance Industries is buying a 24.92% stake in the Ekta Kapoor-promoted Balaji Telefilms Ltd, a listed company, for around ₹ 413 crore.

Balaji's board has approved the investment & the transaction is expected to complete by mid-September.

ZEEL also reportedly held preliminary talks but disagreed on the price.


THE DEAL

Reliance will receive 25.2 million equity shares at ₹ 164 per share.

Reliance said that since it is engaged in the telecom, digital and media businesses, the investment in content production (including digital content) is in line with its businesses.

The investment is not a 'related party' transaction, as none of RIL's promoter or group companies have any prior interest in Balaji Telefilms.

No government or regulatory approvals are expected to be required for the investment.








NO PUBLIC OFFER

Since Reliance is buying 24.92% which is less than 25% stake, it does not have to make an open offer to public shareholders to buy equity at ₹ 164 per share.


BALAJI

Balaji Telefilms, incorporated on November 10, 1994, had a paid-up share capital of ₹ 15.2 crore on March 31, 2017, and generated turnover of ₹ 421 crore in FY 2016-17.

Last year, Balaji raised ₹ 150 crore by diluting stake to fund its OTT venture - ALT Balaji Digital Media Entertainment. Of this, it has spent around ₹ 40 crore.

Balaji hopes to invest up to ₹ 400 crore in ALT Balaji & projects to break-even in 3.5 years, when it attains 4 million paid subscribers in India and abroad. Currently Indian OTT platforms have a negligible number of paid subscribers, and a large number of free viewers. n