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Tag: Essel Group

  • Chandra’s foreign holdings to be transferred to Indian investment company

    Chandra’s foreign holdings to be transferred to Indian investment company

    MUMBAI: Zee Telefilms Ltd. (ZTL) chairman Subhash Chandra will be transferring his foreign holdings to an investment company in India. Under ZTL’s demerged restructuring into separate entities, this is seen as a move to comply with the uplinking regulations on foreign holdings in news channels which are capped at 26 per cent.

    The total foreign shareholding in Zee Telefilms is 54.69 per cent. While the holding of foreign promoters is 22.77 per cent, foreign institutional investors (FIIs) have 31.51 per cent.

    As part of the corporate restructuring, ZTL is spinning off its news and regional channels into Zee News Ltd (ZNL). According to the formula that has been worked out, 137 ZNL shares will fetch 100 shares in ZTL.

    “Chandra will be transferring his foreign holdings to an Indian registered investment company. This will help Zee comply with the uplinking guidelines for the news business,” says Essel Group chief executive officer of corporate strategy and finance Rajiv Garg.

    The shares to be issued to FIIs in ZNL will have to fall within the 26 per cent cap. Foreign shareholders will, thus, be given preference shares of equivalent value to bring it under limit. Along with this, the promoters’ foreign holding will be transferred to an investment vehicle in India.

    The foreign holding of promoters is primarily through Delgrada Ltd. which has 19.98 per cent stake in Zee Telefilms. Delgrada is an overseas corporate body (OCB) owned by Chandra. The balance 2.79 per cent is held by Lazarus Investments Ltd.

    In the fiscal ended 31 March 2006, Zee posted a turnover of Rs 2 billion from its news and regional channels line of business and a net profit of Rs 161 million. “Zee News Ltd targets a turnover of Rs 2.5 billion in FY07 and Rs 2.9 in FY08,” says Garg.

  • Zee fixes share swap ratio for Dish TV

    Zee fixes share swap ratio for Dish TV

    MUMBAI: Zee Telefilms Ltd. (ZTL) today said its shareholders will get 23 shares of ASC Enterprises Ltd (ASCE) for every 10 shares held.

    The ZTL board has also approved a demerger scheme for spinning off its direct consumer business into ASCE, a company promoted by Subhash Chandra’s Essel Group for direct-to-home (DTH) business. Siticable (without its cable business) and its wholly owned subsidiary New Era Entertainment Network Ltd. (NEENL) will merge with ASCE, integrating all DishTV operations under this company.

    In the first stage, Siticable will, thus, hive off its cable TV business into Wire and Wireless India Ltd (WWIL). The residual Siticable and NEENL, which handles marketing and distribution of the DTH business, will then merge with ASCE.

    The paid-up equity capital of ASCE will increase to Rs 1.66 billion after merger, up from the current base of around Rs 411 million. The company plans to bring back the capital base to the pre-merger level by cancelling three of every four shares held in ASCE. “As a result of the merger, ASCE’s capital base will get bloated. We want to compress the base,” said Essel Group CEO, corporate strategy and finance. Rajiv Garg.

    The share exchange ratio is based on the recommendation of independent valuers M/s Deloitte Haskin & Sells.
    ZTL shareholders will receive shares on a proportionate basis in ASCE as consideration. As per the independent valuation, ZTL shareholders will get 230 shares of ASCE of Re 1 each for every 100 shares in ZTL. This would result in a 57 per cent shareholding in ASCE for the shareholders of ZTL,” the company said in a release. The appointed date for the Scheme of Arrangement will be with retrospective effect from 1 April.

    The scheme of arrangement will require approval of the Stock Exchange, shareholders and creditors of Zee and from Bombay High Court. ASCEL will be listed on all stock exchanges where ZTL is listed, the release added

    Commenting on the board’s decision to hive off Zee’s direct consumer business, ZTL chairman Subhash Chandra said, “All Dish TV operations would now be under a single corporate entity, bringing strategic clarity to this high growth business. This shall complete the restructuring agenda we had set for ourselves to create four focused, pure play, listed companies ready to exploit the vast emerging opportunities in each line of business. Subject to necessary approvals, this would result in streamlined operations in each area to build long-term shareholder value. It would also clear the ground for acquisitions and strategic or financial partners in the de-merged businesses, apart from unlocking shareholder value.”

    Zee has sent an application to the Stock Exchange on the restructuring plans for the news, content and cable business. “An application will soon be made to the High Court,” the release said.

  • Zee rejig: 2 companies to merge with ASC Enterprise

    Zee rejig: 2 companies to merge with ASC Enterprise

    NEW DELHI: Two companies related to the consumer service business of the Subhash Chandra-promoted Essel Group’s DTH platform are poised to be merged with ASC Enterprise Ltd, which holds a DTH licence.

    The companies to be merged with ASC Enterprise are Cornersoft Entertainment Co Pvt Ltd and New Era Entertainment Pvt Ltd.

    This is part of the restructuring announced by Zee Telefilms late March to de-merge its various businesses into separate companies to unlock shareholders’ value and conform to varying regulatory needs.

    The direct consumer business is marked by division of activities between the DTH license holder ASC Enterprises Limited and subsidiaries of Siti Cable, the cable arm of Zee Telefilms. This led to lack of clarity in structure, inefficiencies in tax and diffused strategic focus, the Zee management felt.

    The merger proposal, which got the in-principle okay of the Zee board, is likely to be formalised at a board meet of the company on 27 April. ASC Enterprise’s DTH service is marketed under the brand name Dish TV.

    Started in 2004, Cornersoft Entertainment created the 7575 interactive platform for Zee family of channels and other Essel group companies. The interaction happens on the Essel short code 7575, which during the final countdown to Sa Re Ga Ma 2005 Challenge show on Zee TV received almost 5 million SMSs per day. Such massive interaction took it ahead of the popular Times group-owned 8888 platform.

    The 7575 platform has tied up with all the GSM and CDMA phone operators with a powerful national penetration of 98.5 per cent.

    The mission of Cornersoft Entertainment is to integrate, connect and extend high quality and engaging content, applications and services to customers. It’s positioning will help Dish TV market a range of value added services that it plans to offer to its subscribers over a period of time.

    The 7575 service is also a pioneer in integrating TV-SMS, a technology solution that provides live interaction capabilities to play and interact while watching a particular show. Over a period of time, other value added services like ring tones download have also been introduced.

    On the other hand, New Era Entertainment markets the Dish TV services in the country. Launched in October 2003, Dish TV has close to one million subscribers and is presently said to be adding approximately 3000 subscribers every day as awareness about such a service increases in India.

    The Zee Telefilms stock on the Bombay Stock Exchange closed Wednesday at Rs 241.5, down by Rs 2.35, after opening at Rs 243.85. At the National Stock Exchange, the scrip closed at Rs 241.7, down by Rs 2.30 from the last day’s close of Rs 244.

  • E-City Digital to invest Rs 1 billion, have 500 theatres by FY 2008

    E-City Digital to invest Rs 1 billion, have 500 theatres by FY 2008

    MUMBAI: Subhash Chandra-promoted E-City Digital Cinemas Pvt Ltd plans to invest Rs 1 billion in digitising 500 cinema theatres by 2007-’08.

    The company will start delivering movies to the theatres via satellite by next month. Currently, the hard disk is physically distributed to the 22 theatres in Gujarat which it has taken on hire basis. “We will be using the uplinking facility of Essel Shyam at Noida near Delhi. We are investing Rs 1 billion and plan to have 500 digital theatres by FY 2008 in Mumbai, Delhi and Uttar Pradesh territories,” says E-City Ventures CEO Atul Goel. Zee channels are also uplinked from Essel Shyam teleport at Noida.

    Each theatre will have to invest Rs 2 million on the digital technology. E-City will make the investments and will pay fixed weekly theatre hire charges to the exhibitors. The contracts will be for a minimum period of five years. The company will also do deals with film distributors.

    E-City is using Real Image’s encryption technology so that piracy is safeguarded. The movie is first converted into digital master using the telecine machine, after which it can be taken on to D5 tape or captured directly on the encoding server. After encryption and compression, the movie is uplinked to the satellite via transmission server and downloaded at the playout local server which is installed at the theatre. A digital projector is used for screening of the film.

    E-City Digital Cinemas will target A-class towns where the current net collections are over Rs 100,000 per week. Part of the Essel Group of Industries, the company has current earnings of Rs 14 million from the 22 theatres it has recently started digitising. “As we aim to ramp up theatre acquisitions, we expect our revenues to touch Rs 2.5 billion by March-end 2009,” says Goel.

    Digital cinema reduces industry costs by eliminating expensive prints that constitute 15-20 per cent of a film’s cost. It also attacks piracy as every show can have watermark indicating theatre, time and date, making it a customised copyright property. Exhibitors will also get first run movies and a simultaneous nationwide release is possible without distributing prints.

  • Essel, Intel partner on digital content

    Essel, Intel partner on digital content

    NEW DELHI: The Subhash Chandra-promoted Essel Group has launched DMCL (Digital Media Convergence Ltd) as a company that will facilitate the availability of digital content in India.

    Infotech major Intel will partner the Essel Group in this digital venture, according to senior Intel company executives at the ongoing FICCI Frames event in Mumbai.

    DMCL, to be headed by Zee Telefilms president Abhijeet Saxena, will concentrate on acquiring, digitising and making available on various platforms a wide variety of content.

    This content could be special interest content sourced from outside India for the Indian audience as well as Indian/Bollywood content for use in India and outside.

    DMCL will also engage in creating special interest /niche content that will be of immense value to select audiences in India.

    Announcing the initiative, Saxena said, “We have always been very conscious of offering the best in entertainment to our consumers. Keeping our sights on the future of entertainment in the digital new media scenario, we will be at the forefront of providing both new and existing content across various consumer gadgets.”

    Dwelling on shaking hands with Intel, he added, “While selecting the technology and partner for implementation, performance and expertise in successful implementation was given prime consideration. As Intel is a domain specialist, we are very happy to collaborate with them for this effort. We are confident that we will have mutually beneficial partnership with Intel for this gigantic strategic initiative.”

    Intel Corp launched its Intel Viiv technology platform for home entertainment devices at the CES show California in January 2006.

    The Intel Viiv technology is designed to make it easier for people to download, view, manage and share digital entertainment on a variety of viewing screens and networked devices such as portable media players, digital TVs and routers.

    The company is working to bring the Intel Viiv platform to India in the near future.

    DMCL and Intel will work towards offering digital content over the Intel Viiv platform in India. DMCL will offer an agnostic platform, by being an aggregator (including doing re-purposing) for other content owners, starting with Zee Telefilms Ltd.’s content.

    Intel will work with other players in the industry to introduce DMCL as an Intel Viiv content service provider in India. This joint industry supporting effort means that the consumers who procure Intel Viiv will get a ready service available on the platform for them to access information, entertainment and other services.

    Essel Group has diverse national and global business interests, encompassing media programming, broadcast and distribution, specialty packaging, entertainment and trading.