Scatmag.com

February 2017

HATHWAY SEPARATES CABLE TV COMPANY

In a major restructuring exercise, Hathway Cable and Datacom Ltd. has decided to spin off its Cable TV business into a wholly owned subsidiary: 'Hathway Datacom Central Pvt Ltd.'

It will retain its broadband business in the parent company.

This new initiative is a complete reversal of its 26 May 2016 board decision to instead separate the broadband business. Hathway had earlier even announced a demerger scheme to put the broadband business in Hathway Broadband Pvt Ltd (HBPL). The creation of HBPL has been scrapped.

In a board meeting on 12 January 2017, Hathway gave an in-principle approval for spin off the cable TV business into "Hathway Datacom Central Private Limited."


The Cable TV Business Will Be Under 'Hathway Datacom Central Pvt Ltd.'






EXPLANATION

Explaining the rationale, Hathway has said that broadband is the primary growth driver of the business; with larger anticipated gains. It justified the move on because:

♣ It will provide focused attention to each business.

♣ Provide independent structures for future fund raising.

♣ Allow investors to choose CATV or Broadband or both.

♣ Enabling performance comparison with sector companies.


ALL SUBSIDIARIES TOO

The board also gave in-principle nod to five subsidiaries of the company to spin off their respective cable TV business into Hathway Datacom Central Private Limited.

Hathway explained that the move to also separate the cable TV business within its subsidiaries, would:

♣ Reduce Overheads, admin costs & compliances issues.

♣ Reduce inter-company transactions & resulting tax leakages.

♣ Easy GST implementation.

For now, both operations, Cable TV and broadband will be consolidated under Hathway Cable & Broadband Ltd. No specific time frame has been indicated when the cable TV business will be traded separately n