R-Cap sells 49% stake in radio, 100% stake in TV business to Zee Group

Anil Ambani-led Reliance Capital has agreed to sell 49% stake in its radio broadcast business and 100% stake in its general entertainment TV business for value of Rs. 1900 crore to Subash Chandra-led Zee Group as part of its stated strategy to reduce leverage and exposure in non-core business of media and entertainment.

Reliance Broadcast Network Limited (RBNL), the largest operator of FM channels in India, has signed definitive and binding agreements with Zee Media Corporation Limited (ZMCL) to sell 49% stake in its radio broadcast business said a Reliance Capital statement. It added that Zee Entertainment Enterprises Ltd (ZEEL), a separate entity under Zee Group, will acquire 100% stake in the Group’s General Entertainment TV business.

RBNL runs the largest network of FM Radio channels in India under the brand name of 92.7 Big FM that reaches out to 45 cities, 1200 towns and over 200 million people.

The entire proceeds from the stake sale would be used to reduce Reliance Capital’s debt by approx. Rs. 1,900 crore upon the completion of sale transactions. Both these transactions have been approved by the boards of respective companies and are expected to be completed by next year, subject to applicable approvals.

RBNL runs the largest network of FM Radio channels in India under the brand name of 92.7 Big FM that reaches out to 45 cities, 1200 towns and over 200 million people.

The company shall be transferring the 45 operational and 14 new channels into two SPVs respectively and ZMCL shall acquire 49 per cent stake in each of these two SPVs. Both companies shall also have a call/put option for the balance 51 per cent stake in both the SPVs after the stipulated lock-in period.

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Source:The Hindu