TV18’s publishing subsidiary Infomedia 18 has been struck by a net loss of Rs 128.8 million for the quarter October to December, 2009, 3 times higher than losses recorded in the September quarter. However, it is an improvement over the previous year: 57% lower than the net loss of Rs 305.8 million rec0rded in the quarter ended December 2008. The company has various publications such as Overdrive, Chip, T3 and Better Interiors.
Sick Company Application Rejected; Rights Issue
Infomedia is in the process of raising equity through a rights issue to the tune of Rs. 999.23 million to bring it out of the abyss. The issue began on December 29, 2009 and will close on January 15, 2010. The rights issue consists of 29,827,655 equity shares issued at a premium of Rs.23.50 per equity share aggregating to Rs. 999.227 million.
With its losses growing to Rs. 846.5 million in FY 08-09, the company’s debit balance has exceeded its share capital and reserves. During the quarter, its application to the Board for Industrial and Financial Reconstruction (BIFR) as required under the provisions of section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 was rejected on technical grounds. Network18, the parent group, extended its financial support and infused liquidity through inter corporate deposits for Rs. 585 million.
Revenues have fallen 34.8% to Rs 230.38 million in the quarter ended December 2009 from the September quarter and 37.6% on a year on year basis. Last quarter, we saw that Infomedia18 was yet to turn an EBITDA profit; but revenues had risen 22.7% sequentially. Infomedia’s ad revenues from B2B magazines were depressed and its plans to grow expertise in online sales with the Alibaba.com team might help. Alibaba.com is a B2B marketplace.
Expenses for Infomedia18 fell 23.1% to Rs. 319.1 million as a result of tight controls being put into place for cost savings – employee costs fell 29.5% year on year to Rs. 79.53 million as a result of its restructuring exercise. Raw material costs were at Rs. 75.1 million.
Other expenses soared to Rs. 167.7 million with Rs. 6 million provisioned for doubtful debts and Rs. 26.41 million spent on advertising and publicity. Infomedia18 had planned to rev up its magazine business by associating with events and expositions during this quarter. Infomedia18 had taken an incremental term loan to fund its new media businesses.