DTH company Dish TV, owned by the Essel Group, has informed the BSE that it is raising $100 million from the issue of 117,035 global depository receipts (GDRs, with each GDR representing 1000 equity shares of Re. 1 each) at a price of $854.5 per GDR. This is expected to raise an aggregate of $100 million from PE firm Apollo Management, which will hold 11% stake in Dish TV post the issue.
Apollo Management has previously invested in Hughes Network Systems, IntelSat, Sirius Satellite Radio, Swiss cable and Internet service provider CableCom and UnityMedia. The deal is expected to close on November 30, 2009.
Funds To Be Used To Add More Users
The capital infusion will be used to expand Dish TV’s subscriber base, which was at 5.91 million, at the end of the quarter ended Sep 09. There are 15.17 million DTH connections in the country but there is plenty of room for growth. There are six other players in the DTH market in India: Tata Sky, Reliance ADAG’s BIG TV, Airtel Digital TV, Sun Direct, DD Direct and Videcon D2H.
Dish TV appears to be on the road to profitability, with a 18.8% decline in net losses to Rs. 561.33 million; revenues for the quarter ended September 2009 grew 4.37% sequentially.
The company has also been holding onto a Headend In The Sky (HITS) platform in expectation of the HITS policy which has recently been announced. It will now be transferred to its sister cable company WWIL. The company spent Rs. 35 million towards HITS content costs in the last quarter and can expect returns now.
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