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Network18 & TV18 File For Rights Issue Following RIL Deal

Following the announcement of divesting its stake in ETV to TV18, by Reliance Industries, both TV18 and Network18 have filed for a rights issue with the BSE, in order to fund the acquisition. Note that TV18 and Network18 are funding the acquisition through a consolidated Rs 5400 crore rights issue, a part of which is being subscribed to Network18 Promoters backed by RIL backed Independent Media Trust. As we had suggested earlier, RIL is indirectly subscribing to TV18 and Network18 debentures through its promoter group, and money raised from that is being used to fund the acquisition of stake in ETV Channels owned by RIL.

Rights issue:

– Network18 has filed for a rights issue of Rs 2699.62 crore, offering 89,98,73,930 shares, in the ratio 307:50, being offered at Rs 30 per share to existing shareholders. This means that existing equity Shareholders would be allotted 307 Equity Shares for every 50 Equity Shares held as on the Record Date.

– TV18 Broadcast has also filed for a rights issue of Rs 2699.16 crore, offering 134,95,77,882 shares, in the ratio 41:11, being offered at Rs 20 per share to existing shareholders. This means that existing equity Shareholders would be allotted 41 Equity Shares for every 11 Equity Shares held as on the Record Date of 17th September 2012.

During the announcement of the acquisition and of the rights issue approval, the group had said that the current Promoter Entities of Network18 were to acquire shares worth Rs 1700 crores of the rights issue, and that they have have entered into an arrangement with Independent Media Trust, a trust set up for the benefit of Reliance Industries Limited, for this. The Promoters also reserve the right to subscribe to any unsubscribed public portion of the Rights Issues.

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