Barely 20 days since it sold 69% in NDTV Lifestyle Ltd to Scripps Networks for $55 million, NDTV Ltd has sold 76% stake in its subsidiary NDTV Imagine Ltd for $117 million to Turner Asia Pacific Ventures. Vikram Chandra, CEO of NDTV Networks spoke to Medianama about the reasons behind selling majority stakes in the entertainment subsidiaries and the benefits to the parent company. NDTV recorded losses of Rs. 118.5 million in the quarter ended September 2009 and standalone income from operations were down 6.17% year on year at Rs. 693.5 million.
Why did you sell majority stake in both your entertainment channels?
From our point of view, it was a 4 part restructuring process that started with:
1) Buyback of NBC Universal’s stake
2) Our repurchased bonds were a massive overhang and were to be repaid in May. They had a restrictive component..they were for $72.14 million and we bought them back.
3) Was Scripps and
4) Is this latest stake sale to Turner.
The two big questions we were facing were: one, bonds repayment, and two – how will the team continue to grow and have access to capital. We were clear we needed a long term strategic partner. For various reasons, NBCU chose to exit and we had to look for another partner.
Over the past 2 months we have managed to get the answers to these questions plus, for NDTV Ltd, the parent company,the big news is our cash flow becoming positive, which is huge for a media company. So we have repaid our debts and are cash positive.
Where will the proceeds be invested?
Some money is going to fund the business, some to the bonds. The bonds cost $72.14 million; the $50 million from Scripps and $65 million for NDTV Imagine from Turner will go into development.
Will there be any brand name changes to the channels?
It’s too premature to say. With Scripps, there was more visibility to the deal than with the Turner deal. Scripps’ channels are known.
When will you be launching more channels?
It’s fair to say let’s not prejudge what will happen. It (the deal with Turner) is still subject to their (Time Warners) board’s approval. There are no plans yet to launch any channels, with Scripps nor for Turner until regulatory approval is obtained.