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Videocon D2H sells 33.5% stake to Silver Eagle Acquisition Corp for $300m

Videocon D2H LogoU.S.-based Silver Eagle Acquisition Corp (SEAC) has invested $33 million for a 33.5% stake in India’s Videocon d2h, the direct-to-home TV service provider of the Videocon Group. The Economic Times says that the company was valued at $900 million and with its debt of Rs 2000 crore, it could reach a valuation of $1.2 billion.

Following the completion of this deal, Videocon d2h intends to apply for a listing on Nasdaq under the ticker VDTH and the shares will be represented by American Depositary Shares (ADSs) which will be distributed directly to Silver Eagle’s stockholders. The Economic Times added that the proceeds of the deal will be used for reducing debt and expanding operations in India that will undergo the third and fourth phases of cable television digitisation by 2016-end.

Harry Sloan and Jeff Sagansky, Silver Eagle’s chairman and chief Executive and president, respectively, are expected to join the board of directors of Videocon d2h.

Earlier in October 2014, Videocon d2h re-filed for an IPO in India and is looking to raise Rs 700 crore. The starting price or the number of shares being offered is yet to be disclosed and seven banks including Axis Capital, Edelweiss, ICICI Securities, IDBI Capital, UBS, SBI Capital Markets and Yes Bank have been appointed as joint book runners. In the filing, Videocon d2h also notes that it is looking to raise up to Rs 50 crore through a pre-IPO placement of up to 5 million shares (5,000,000 equity shares) with a face value of Rs 10 each.

It’s worth noting that in December 2012, Videocon d2h had filed for an IPO and received an approval from market regulator SEBI in March 2013 but did not go ahead with the deal due to unfavourable market conditions.

Videocon d2h commenced DTH operations in July 2009 and has since grown to a gross subscriber base of 11.8 million and a market share of 16.5% in the Indian DTH market as of September 30, 2014. For the fiscal year ended March 31, 2014, and the six months ended September 30, 2014, Videocon d2h had approximately 27.7% and 26.1%, respectively, of the incremental market share of the DTH subscriber base in India.

Videocon d2h reported a total income of Rs 1,760.8 crore for the year ended March 31, 2014, up from Rs 1,120.5 crore in the previous year. The losses however has moderately improved to Rs 469.4 crore for the year, as compared to Rs 515.1 crore in the previous year. For the quarter ended June 30, 2014, Videocon d2h posted total revenues of Rs 537.7 crore and a net loss of Rs 78.1 crore.

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