Disney puts Rs 924 cr into UTV
Walt Disney, the world’s third largest entertainment company, is making its presence felt in the India’s rising entertainment industry.india Updated: Feb 18, 2008 21:17 IST
Walt Disney, the world’s third largest entertainment company, is making its presence felt in the India’s rising entertainment industry.
It is investing close to Rs 924 crore to increase its stake in UTV and its arm UTV Global almost a eight months after acquiring the Hungama channel. Walt Disney has now increased its stake in UTV Software Communications Ltd to 32.1 per cent from 14.9% for a consideration of Rs 805 crore. It will spend Rs 119 crore for a 15% stake in UTV Global Broadcasting Ltd.
UTV Global is the broadcasting arm of UTV.With 10 million DTH subscribers expected by the next two years, and pay revenues going up, the broadcasting industry is headed for good times.
Speaking to Hindustan Times, Ronnie Screwvala, founder promoter and group CEO of UTV said, “A total of Rs 360 crore is being invested into our broadcasting venture-Rs 240 crore by us and Rs 120 crore by Disney. This will make for the peak funding needed over the next two years.” Shashi Sinha, CEO of Lodestar Universal said, “Such deals help a lot in terms of cross-linkages. They also pave way for deeper client relationships.”
Disney presently has three channels in India: Disney, Toon Disney and Hungama channel.
Under existing regulations, it can make an open offer for up to 20 per cent of the equity share capital of UTV. However, for a period of 4 years from the offer completion date, the promoters would have a right to buy any shares that Disney would acquire as a result of open offer. During this time Disney would not be able to exercise its voting rights on such shares, and its shareholding in UTV in the next four years is capped at 32.1 per cent effectively.