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HT Media Hives Off Desimartini; Writing Off Rs 159.4 Cr Invested In HT Digital

HT Digital, a digital holdings company owned by HT Media, has filed a petition in the Delhi High Court for reduction in its equity capital by Rs 159.4 crore. The petition is due for hearing on Feb 26th 2014, and once this is approved, the equity share capital of HT Digital will be reduced to Rs 17.24 crore, and HT Media will write off Rs 159.4 crore. However, the company says that this will have no impact on its consolidated financial results. In the last six quarters alone, HT Media has invested Rs 34.89 crore in HT Digital, according to notes to its filings. According to a note to HT Media’s consolidated results for Q3-FY14:

“During the quarter, consequent to the Scheme referred in footone to note 8 above, HT Digital has filed a petition with the Hon’ble High Court of Delhi w/s 100 to 105 of the Companies Act, 1956 for reduction in its equity capital by Rs. 15,940 Lacs. The Hon’ble High Court of Delhi has admitted the petition and is due for hearing on February 26, 2014. Once this petition is approved by the Hon’ble High Court, the equity share capital of HT Digital shall stand reduced from existing Rs 17,664 Lacs to Rs 1,724 Lacs and accordingly, the Parent Company (HT Media) will reduce its equity investment in HT Digital from Rs 17,664 Lacs to Rs 1,724 Lacs by writing off the investment by Rs 15,940 Lacs. However, this will have no impact on the consolidated financial results. ”

The note 8 refers to the restructuring between Firefly e-Ventures (FEVL), which is a subsidiary of HT Media via HT Media’s wholly owned subsidary HT Digital), for the demerger of Shine.com, and the transfer of the company from FEVL to HT Media, which came into effect last year. Shine.com had reported a loss before tax of Rs 31.19 crore for the financial year ended on March 31, 2013, despite year on year revenue growth of 50% for the full year.

Transfer of Desimartini to Top Movies

desi-martiniFirefly e-ventures has also transferred its movie review and ratings business (desimartini.com) on a slump sale basis to another subsidiary – Top Movies Entertainmentfor – for Rs 95 lakhs. However, the company says that this will have no impact on its consolidated financial results. In the last two quarters alone, HT Media has invested Rs 2 crore in Top Movies Entertainment, some of which, we assume, would have been used for the transfer for Rs 95 lakh.

ht media subsidiaries

Desimartini*, then a social networking site, was acquired by HT Media in 2007 for an undisclosed amount. It has since morphed into a movie review site. Hiving off the venture into a separate appears to indicate that HT Media has plans to focus on it as a separate business, and either grow it or sell it.

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More details on the filings on Page 6 of HT Media’s consolidated results filing. Relevant details on points 8, 9, 10.

Disclosure: Desimartini was founded by my cousin Vivek Pahwa

 

Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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