The media sector seems to be the latest blue-eyed baby of private equity funds. After huge investments in Nimbus and Eenadu group by private equity players, Rajan Raheja-controlled Asianet Satellite Telecommunications Ltd is close to striking a deal with PE fund Providence Equity Partners.
The US-based fund, which manages over $20 billion investments worldwide, is understood to be investing close to $60 million (Rs 275 crore) in Asianet Satellite Communications Ltd, an integrated cable channel network company in Kerala. Providence, known for its focus on media and entertainment sectors, recently moved its Managing Director of London operations, Biswajit Subramanian, to head the Indian operations, signalling its growing interest in the Indian market.
A booming Indian economy and growing need for content is fuelling the growth of Indian entertainment and media industry that is slated to grow at 19 per cent to $18 billion by 2010 from its current size of $7 billion according to a study by FICCI and PricewaterhouseCoopers (PWC).
“Negotiations have reached advanced stage and the deal could be signed shortly,” said a banker close to the transaction. Raheja’s Hathway Investments owns the entire stake in Asianet Satellite Communication Ltd.
Sources said that Providence might pick up a strategic stake in the company and the Mumbi-based Rajan Raheja group, which also has interests in cement, ceramic tiles, publishing and retailing, will continue to manage the affairs. The funds would be used for the company's on-going expansion plans, according to banking sources. Providence officials could not be contacted for comment. Asianet Satellite Communications Ltd president and CEO Mahesh Kumar said, “We would not like to comment on these issues. We are not talking to anyone.”
Asianet had raised funds to the tune of Rs 30 crore by issuing redeemable non-cumulative preference shares to NRI investor Satish Raheja, on repatriation basis. Blackstone has recently invested $275 million in Ramoji Rao controlled Ushodaya Enterprises. Three foreign investors 3i, Cisco and Oman International Fund (OIF) have also made investments in Nimbus Communications.