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  • DEN seeks Goldman Sachs investment nod from shareholders

    DEN seeks Goldman Sachs investment nod from shareholders

    MUMBAI: Leading Indian multisystem cable TV operator (MSO) DEN Networks –promoted by Sameer Manchanda- which got its board’s nod to issue another 1.58 crore shares at a price of Rs 90 per share to existing investor Goldman Sachs is now seeking shareholder approval for the same through an extraordinary general meeting to be held on 14 October 2016.

    DEN says it will be issuing the preferential shares to Goldman Sachs affiliate firms Broad Street Investments (Singapore) Pte Ltd and MBD Bridge Street 2016 Investments Pte Ltd. The former will subscribe to 1.30 crore shares taking its holding to 4.18 crore shares. Constituting 21.6 per cent of Den Networks equity. The latter will mop up 28.24 lakh shares and a first time investor in DEN its holding will be at 1.46 per cent.

    Once completed the preferential share issue will see the promoters’ shareholding falling from 28.52 per cent to 26.19 per cent; corporate bodies from 11.53 per cent to 10.59 per cent; institutional investors from 22.20 to 20.39 per cent; private corporate bodies from 7.30 per cent to 6.71 per cent and finally the holding of foreign bodies will jump from 22.93 per cent to 29.21.

    DEN Networks has said it will use the $21 million funds to pare down its debt from Rs 852 crore in June 2016 and also expand its broadband business through its subsidiary. The company’s debt stood at Rs 895 crore in March 2016 and at Rs 930 crore in March 2015. Between 31 March 2016 and June 2016, DEN Networks raised Rs 89 crore in debt and repaid Rs 132 crore.

  • DEN seeks Goldman Sachs investment nod from shareholders

    DEN seeks Goldman Sachs investment nod from shareholders

    MUMBAI: Leading Indian multisystem cable TV operator (MSO) DEN Networks –promoted by Sameer Manchanda- which got its board’s nod to issue another 1.58 crore shares at a price of Rs 90 per share to existing investor Goldman Sachs is now seeking shareholder approval for the same through an extraordinary general meeting to be held on 14 October 2016.

    DEN says it will be issuing the preferential shares to Goldman Sachs affiliate firms Broad Street Investments (Singapore) Pte Ltd and MBD Bridge Street 2016 Investments Pte Ltd. The former will subscribe to 1.30 crore shares taking its holding to 4.18 crore shares. Constituting 21.6 per cent of Den Networks equity. The latter will mop up 28.24 lakh shares and a first time investor in DEN its holding will be at 1.46 per cent.

    Once completed the preferential share issue will see the promoters’ shareholding falling from 28.52 per cent to 26.19 per cent; corporate bodies from 11.53 per cent to 10.59 per cent; institutional investors from 22.20 to 20.39 per cent; private corporate bodies from 7.30 per cent to 6.71 per cent and finally the holding of foreign bodies will jump from 22.93 per cent to 29.21.

    DEN Networks has said it will use the $21 million funds to pare down its debt from Rs 852 crore in June 2016 and also expand its broadband business through its subsidiary. The company’s debt stood at Rs 895 crore in March 2016 and at Rs 930 crore in March 2015. Between 31 March 2016 and June 2016, DEN Networks raised Rs 89 crore in debt and repaid Rs 132 crore.

  • Goldman Sachs to up stake in cable TV MSO DEN Networks; to invest Rs 142.43 crore

    Goldman Sachs to up stake in cable TV MSO DEN Networks; to invest Rs 142.43 crore

    MUMBAI: MSO DEN Networks has proved the naysayers – who have been carping that the Indian cable TV sector is as insipid as dry sawdust – wrong. The company’s existing shareholder Goldman Sachs is picking up 1.58 crore equity shares at a price of Rs 90 per share via a preferential allotment. This will take Goldman Sachs’ equity stake in DEN up from 17.79 per cent to 24.49 per cent and involve an injection of much needed capital to the tune of Rs 142.43 crore. The divestment is expected to trim promoter stake in the company to 37 percent.

    Board approval for this transaction came through yesterday and the company is seeking its shareholders’ nod through an extraordinary general meeting which is scheduled for 14 October 2016. DEN Networks informed the BSE about its intentions yesterday.

    Media observers say that the Indian cable TV ecosystem – including the government, the regulator TRAI, broadcasters, MSOs and cable TV operators – has stumbled in the digitization process which was mandated by the ministry of information and broadcasting four years back. They have also been saying that investor sentiment towards the sector is pretty weak. Shares of most leading Indian cable TV companies have been depressed, and have been parked at lows.

    However, DEN Networks has been taking steps to correct the perception. It has brought back its CEO SN Sharma who has since been working on raising revenues and profitability.

    The Goldman investment should come as a shot in the arm for DEN Networks as well as the Indian cable TV sector which is grappling with reinventing its business model.

    The company’s CFO Manish Dawar told CNBC TV18 that the company will be utilising the funds to invest in the broadband business as well as to reduce its debt. Earlier, this month, it had got board approval to demerge its broadband/internet service provider (ISP) business undertaking into its wholly owned subsidiary Skynet Cable Network . The company’s ISP business had a turnover of around Rs 40 crore in FY-2016.

    Dawar told the business news channel that DEN’s performance is on the upswing. “In Q1 we have already turned positive on EBITDA basis and if we were to look at I am talking about pre-activation which is what the investors wanted to kind of look at, so, therefore Q1 on cable business we are already EBITDA positive. Broadband is progressing very well, we have been able to reduce our losses tremendously over the last one year,” he said. “TV-Shop we are very close to break even. So, if you were to look at on a consolidated basis also, in the current quarter and I am talking about on a like-to- like basis, last quarter we were at minus (–) Rs 5 crore and the current quarter is positive Rs 5 crore on consolidated basis.”

    Investors greeted the Goldman Sachs announcement with delight. DEN Networks shares hit a high of Rs 85 during day trading yesterday only to close at Rs 80.85 – a rise of 3.5 per cent. The company’s share had hit a 52 week high of Rs 133 (21 September 2015) and it had dropped to a low of Rs 60.50 on 15 February 2016.

    The company also made an investor presentation yesterday in which it stated that its digital rollout is progressing well. Of the 13 million subscribers it has, almost 9.8 million of them have upgraded to digital in Q1 2017. Five million of these are in DAS Phase I & II areas with the remainder being in Phase III and phase IV.

  • Goldman Sachs to up stake in cable TV MSO DEN Networks; to invest Rs 142.43 crore

    Goldman Sachs to up stake in cable TV MSO DEN Networks; to invest Rs 142.43 crore

    MUMBAI: MSO DEN Networks has proved the naysayers – who have been carping that the Indian cable TV sector is as insipid as dry sawdust – wrong. The company’s existing shareholder Goldman Sachs is picking up 1.58 crore equity shares at a price of Rs 90 per share via a preferential allotment. This will take Goldman Sachs’ equity stake in DEN up from 17.79 per cent to 24.49 per cent and involve an injection of much needed capital to the tune of Rs 142.43 crore. The divestment is expected to trim promoter stake in the company to 37 percent.

    Board approval for this transaction came through yesterday and the company is seeking its shareholders’ nod through an extraordinary general meeting which is scheduled for 14 October 2016. DEN Networks informed the BSE about its intentions yesterday.

    Media observers say that the Indian cable TV ecosystem – including the government, the regulator TRAI, broadcasters, MSOs and cable TV operators – has stumbled in the digitization process which was mandated by the ministry of information and broadcasting four years back. They have also been saying that investor sentiment towards the sector is pretty weak. Shares of most leading Indian cable TV companies have been depressed, and have been parked at lows.

    However, DEN Networks has been taking steps to correct the perception. It has brought back its CEO SN Sharma who has since been working on raising revenues and profitability.

    The Goldman investment should come as a shot in the arm for DEN Networks as well as the Indian cable TV sector which is grappling with reinventing its business model.

    The company’s CFO Manish Dawar told CNBC TV18 that the company will be utilising the funds to invest in the broadband business as well as to reduce its debt. Earlier, this month, it had got board approval to demerge its broadband/internet service provider (ISP) business undertaking into its wholly owned subsidiary Skynet Cable Network . The company’s ISP business had a turnover of around Rs 40 crore in FY-2016.

    Dawar told the business news channel that DEN’s performance is on the upswing. “In Q1 we have already turned positive on EBITDA basis and if we were to look at I am talking about pre-activation which is what the investors wanted to kind of look at, so, therefore Q1 on cable business we are already EBITDA positive. Broadband is progressing very well, we have been able to reduce our losses tremendously over the last one year,” he said. “TV-Shop we are very close to break even. So, if you were to look at on a consolidated basis also, in the current quarter and I am talking about on a like-to- like basis, last quarter we were at minus (–) Rs 5 crore and the current quarter is positive Rs 5 crore on consolidated basis.”

    Investors greeted the Goldman Sachs announcement with delight. DEN Networks shares hit a high of Rs 85 during day trading yesterday only to close at Rs 80.85 – a rise of 3.5 per cent. The company’s share had hit a 52 week high of Rs 133 (21 September 2015) and it had dropped to a low of Rs 60.50 on 15 February 2016.

    The company also made an investor presentation yesterday in which it stated that its digital rollout is progressing well. Of the 13 million subscribers it has, almost 9.8 million of them have upgraded to digital in Q1 2017. Five million of these are in DAS Phase I & II areas with the remainder being in Phase III and phase IV.

  • Q1-17: Den Networks reports higher standalone revenue, operating profits

    Q1-17: Den Networks reports higher standalone revenue, operating profits

    BENGALURU: Multiple-systems operator Den Networks Limited (Den) reported 21.2 percent increase in standalone Total Income from operations (TIO) for the quarter ended June 30, 2016 (Q1-17, current quarter) as compared to the corresponding year ago quarter (Q1-16). The company also reported a standalone operating profit (EBIDTA) of Rs 4.58 crore (1.9 percent margin) in the current quarter as opposed to a standalone operating loss (negative EBIDTA) of Rs 26.44 crore. Den’s standalone TIO for the current quarter was Rs 238.67 crore as compared to Rs 196.89 crore. EBIDTA including other income was Rs 15.45 crore (6.2 percent margin) in Q1-17 as opposed to an operating loss (including other income) of Rs 6.01 crore in Q1-17.

    However the company reported higher standalone losses for the current quarter as compared to the corresponding year ago quarter. Net loss after tax (PAT) increased to Rs 57.40 crore in Q1-17 as compared to loss of Rs 53.49 crore in Q1-16. Standalone Total Comprehensive Income (TCI) was lower at a negative Rs 56.93 crore in Q1-17 as compared a negative Rs 51.74 crore in Q1-16.

    Segment numbers

    The company has two operating segments – Cable Distribution Network (Cable) and Broadband. Both segments reported improved operating numbers.

    Cable segment reported 15.1 percent growth in standalone operating revenue in Q1-17 at Rs 220.88 crore as compared to Rs 191.87 crore in Q1-16. Standalone operating loss in the current quarter was lower at Rs 31.19 crore as compared to a standalone operating loss of Rs 37.29 core in Q1-16.

    Broadband segment standalone revenue more than tripled (over 3.5 times) in the current quarter to Rs 17.79 crore as compared to Rs 5.02 crore in Q1-16. The segment reported lower standalone operating loss in Q1-17 of Rs 14.26 crore as compared to an operating loss of Rs 19.24 crore in the corresponding year ago quarter.

    Let us look at the other numbers reported by Den

    Standalone Total Expenditure in the current quarter was 12.1 percent higher at Rs 284.12 crore (119 percent of TIO) as compared Rs 253.43 crore (128.7 percent of TIO) in Q1-16.

    As percentage of TIO, Total expenditure in the current quarter was lower as compared to Q1-16. Most major standalone cost heads decreased in the current quarter as compared to the corresponding year ago quarter except for Content Costs, Other Expenses and Depreciation and Amortisation and hence wiped away the increase in TIO and resulted in higher loss. Other factors that contributed to higher loss were lower Other Income and higher Finance costs in Q1-17.

    As mentioned above, a major cost head for Den is Content Costs which increased by a massive Rs 30.70 crore or 35 percent to Rs 107.28 crore (44.9 percent of TIO) in Q1-17 from Rs 79.47 crore (40.4 percent of TIO). Standalone

    Other Expenses increased 5.4 percent in the current quarter to Rs 62 crore (26 percent of TIO) as compared to Rs 58.84 crore (29.9 percent of TIO) in Q1-16.

    Standalone Placement fees declined 21.8 percent in the current quarter to Rs 43.69 crore (18.3 percent of TIO) as compared to Rs 55.89 crore (28.4 percent of TIO).

    Standalone Employee benefits expense in Q1-17 declined 14.3 percent to Rs 19.57 crore (8.2 percent of TIO) as compared to Rs 22.83 crore (11.6 percent of TIO) in Q1-16.

    Standalone Finance costs in the current quarter increased 31.2 percent to Rs 22.82 crore (9.6 percent of TIO) as compared to Rs 17.39 crore (8.8 percent of TIO) in Q1-16.

    Standalone Other Income in Q1-17 was almost half (declined 46.8 percent) to Rs10.87 crore as compared to Rs 20.43 crore in Q1-16.

    Note: (1) All numbers mentioned in this report are standalone unless stated otherwise.

  • Q1-17: Den Networks reports higher standalone revenue, operating profits

    Q1-17: Den Networks reports higher standalone revenue, operating profits

    BENGALURU: Multiple-systems operator Den Networks Limited (Den) reported 21.2 percent increase in standalone Total Income from operations (TIO) for the quarter ended June 30, 2016 (Q1-17, current quarter) as compared to the corresponding year ago quarter (Q1-16). The company also reported a standalone operating profit (EBIDTA) of Rs 4.58 crore (1.9 percent margin) in the current quarter as opposed to a standalone operating loss (negative EBIDTA) of Rs 26.44 crore. Den’s standalone TIO for the current quarter was Rs 238.67 crore as compared to Rs 196.89 crore. EBIDTA including other income was Rs 15.45 crore (6.2 percent margin) in Q1-17 as opposed to an operating loss (including other income) of Rs 6.01 crore in Q1-17.

    However the company reported higher standalone losses for the current quarter as compared to the corresponding year ago quarter. Net loss after tax (PAT) increased to Rs 57.40 crore in Q1-17 as compared to loss of Rs 53.49 crore in Q1-16. Standalone Total Comprehensive Income (TCI) was lower at a negative Rs 56.93 crore in Q1-17 as compared a negative Rs 51.74 crore in Q1-16.

    Segment numbers

    The company has two operating segments – Cable Distribution Network (Cable) and Broadband. Both segments reported improved operating numbers.

    Cable segment reported 15.1 percent growth in standalone operating revenue in Q1-17 at Rs 220.88 crore as compared to Rs 191.87 crore in Q1-16. Standalone operating loss in the current quarter was lower at Rs 31.19 crore as compared to a standalone operating loss of Rs 37.29 core in Q1-16.

    Broadband segment standalone revenue more than tripled (over 3.5 times) in the current quarter to Rs 17.79 crore as compared to Rs 5.02 crore in Q1-16. The segment reported lower standalone operating loss in Q1-17 of Rs 14.26 crore as compared to an operating loss of Rs 19.24 crore in the corresponding year ago quarter.

    Let us look at the other numbers reported by Den

    Standalone Total Expenditure in the current quarter was 12.1 percent higher at Rs 284.12 crore (119 percent of TIO) as compared Rs 253.43 crore (128.7 percent of TIO) in Q1-16.

    As percentage of TIO, Total expenditure in the current quarter was lower as compared to Q1-16. Most major standalone cost heads decreased in the current quarter as compared to the corresponding year ago quarter except for Content Costs, Other Expenses and Depreciation and Amortisation and hence wiped away the increase in TIO and resulted in higher loss. Other factors that contributed to higher loss were lower Other Income and higher Finance costs in Q1-17.

    As mentioned above, a major cost head for Den is Content Costs which increased by a massive Rs 30.70 crore or 35 percent to Rs 107.28 crore (44.9 percent of TIO) in Q1-17 from Rs 79.47 crore (40.4 percent of TIO). Standalone

    Other Expenses increased 5.4 percent in the current quarter to Rs 62 crore (26 percent of TIO) as compared to Rs 58.84 crore (29.9 percent of TIO) in Q1-16.

    Standalone Placement fees declined 21.8 percent in the current quarter to Rs 43.69 crore (18.3 percent of TIO) as compared to Rs 55.89 crore (28.4 percent of TIO).

    Standalone Employee benefits expense in Q1-17 declined 14.3 percent to Rs 19.57 crore (8.2 percent of TIO) as compared to Rs 22.83 crore (11.6 percent of TIO) in Q1-16.

    Standalone Finance costs in the current quarter increased 31.2 percent to Rs 22.82 crore (9.6 percent of TIO) as compared to Rs 17.39 crore (8.8 percent of TIO) in Q1-16.

    Standalone Other Income in Q1-17 was almost half (declined 46.8 percent) to Rs10.87 crore as compared to Rs 20.43 crore in Q1-16.

    Note: (1) All numbers mentioned in this report are standalone unless stated otherwise.

  • Den Networks confirms S N Sharma appointment as CEO

    Den Networks confirms S N Sharma appointment as CEO

    MUMBAI: A few days ago Indiantelevision.com reported that S N Sharma would be re-joining Den Networks after departing from it a year and a half or so ago. The report was based on sources and it was unconfirmed. Today Den Networks informed the Bombay Stock Exchange (BSE) that Sharma will indeed be re-joining the national cable TV MSO Den as its chief executive officer (CEO) with immediate effect. Erstwhile CEO Pradeep Parameswaran will continue to work with the company as an advisor to the company.

    A cable TV industry veteran Sharma has over 30 years of experience of which over 25 years have been in media. He holds a Bachelor’s degree in Electronics and Communications and a Master’s degree in Business Administration.

    DEN Networks chairman & managing director Sameer Manchanda said that he was happy to welcome Sharma back to the DEN family. Said he: “We are confident of Sharma’s unparalleled experience in the cable TV Industry and under his able leadership DEN will scale greater heights in time to come. DEN’s cable TV partners and associates on the ground are all geared up to work in perfect coordination to adopt new systems and technologies for better monetisation of investments.”

  • Den Networks confirms S N Sharma appointment as CEO

    Den Networks confirms S N Sharma appointment as CEO

    MUMBAI: A few days ago Indiantelevision.com reported that S N Sharma would be re-joining Den Networks after departing from it a year and a half or so ago. The report was based on sources and it was unconfirmed. Today Den Networks informed the Bombay Stock Exchange (BSE) that Sharma will indeed be re-joining the national cable TV MSO Den as its chief executive officer (CEO) with immediate effect. Erstwhile CEO Pradeep Parameswaran will continue to work with the company as an advisor to the company.

    A cable TV industry veteran Sharma has over 30 years of experience of which over 25 years have been in media. He holds a Bachelor’s degree in Electronics and Communications and a Master’s degree in Business Administration.

    DEN Networks chairman & managing director Sameer Manchanda said that he was happy to welcome Sharma back to the DEN family. Said he: “We are confident of Sharma’s unparalleled experience in the cable TV Industry and under his able leadership DEN will scale greater heights in time to come. DEN’s cable TV partners and associates on the ground are all geared up to work in perfect coordination to adopt new systems and technologies for better monetisation of investments.”

  • DEN Networks takes control of Snapdeal home shopping JV

    DEN Networks takes control of Snapdeal home shopping JV

    MUMBAI: Jasper Infotech CEOs Kunal Bahl and Rohit Bansal are working on getting their ecommerce platform Snapdeal in ship shape by focusing on customer satisfaction and net revenues instead of gross merchandise value (GMV). This follows the march that rivals such as Flipkart and Amazon have stolen from it.

    Getting rid of any diversifications and other assets that are not scaling up is probably part of the fitness plan. And that explains why the company has decided to divest its equity stake in Macro Commerce Private Ltd, which operates the DEN-Snapdeal home shopping channel.

    When it was launched as a 50:50 joint venture with cable TV MSO DEN Networks with much hype last year, Bahl had stated that he was targeting Rs 500 crore in revenues from TV commerce in year one.
    The numbers did not stack up and Snapdeal TV did a turnover of Rs 3.17 crore in 2015 and Rs 28 crore in 2017.

    DEN Network promoter Sameer Manchanda probably has more faith in the home shopping television initiative than Bahl. Hence, late last week DEN informed the Bombay Stock Exchange that it was buying an additional 32.87 per cent stake in the company from Jasper Infotech at a cost of Rs 60 million. Rs 10 million is for purchase of existing shares and Rs 50 million is through a rights issue, which will lead to an infusion of funds into Macro Commerce.

    Post the acquisition, DEN Networks’ shareholding will rise to 82.87 per cent in Macro from the 50 per cent currently.

    The purpose of the deal, the cable MSO says, is to take a controlling stake in the venture, expand the business and effectively manage the operations of the TV channel.

    The market responded well to DEN Networks’ announcement: its shares rose to Rs 94.70 in early morning trades, then dropped to Rs 89.90 – a rise of 0.35 paise over its previous close by day’s end.

  • DEN Networks takes control of Snapdeal home shopping JV

    DEN Networks takes control of Snapdeal home shopping JV

    MUMBAI: Jasper Infotech CEOs Kunal Bahl and Rohit Bansal are working on getting their ecommerce platform Snapdeal in ship shape by focusing on customer satisfaction and net revenues instead of gross merchandise value (GMV). This follows the march that rivals such as Flipkart and Amazon have stolen from it.

    Getting rid of any diversifications and other assets that are not scaling up is probably part of the fitness plan. And that explains why the company has decided to divest its equity stake in Macro Commerce Private Ltd, which operates the DEN-Snapdeal home shopping channel.

    When it was launched as a 50:50 joint venture with cable TV MSO DEN Networks with much hype last year, Bahl had stated that he was targeting Rs 500 crore in revenues from TV commerce in year one.
    The numbers did not stack up and Snapdeal TV did a turnover of Rs 3.17 crore in 2015 and Rs 28 crore in 2017.

    DEN Network promoter Sameer Manchanda probably has more faith in the home shopping television initiative than Bahl. Hence, late last week DEN informed the Bombay Stock Exchange that it was buying an additional 32.87 per cent stake in the company from Jasper Infotech at a cost of Rs 60 million. Rs 10 million is for purchase of existing shares and Rs 50 million is through a rights issue, which will lead to an infusion of funds into Macro Commerce.

    Post the acquisition, DEN Networks’ shareholding will rise to 82.87 per cent in Macro from the 50 per cent currently.

    The purpose of the deal, the cable MSO says, is to take a controlling stake in the venture, expand the business and effectively manage the operations of the TV channel.

    The market responded well to DEN Networks’ announcement: its shares rose to Rs 94.70 in early morning trades, then dropped to Rs 89.90 – a rise of 0.35 paise over its previous close by day’s end.