Hathway Cable in planning to demerge its broadband business into a fully owned subsidiary of Hathway Broadband, the company reported via a BSE filing. According to the company, the definitive terms and conditions of the demerger are still being evaluated and the demerger is subject to requisite approvals from the shareholders, creditors and other regulatory/government authorities.

Interestingly, the company also got an approval from the board to increase the limit for borrowing loans in excess of paid-up capital and free reserves from Rs 1,600 crore to Rs 1,800 crore. Given the separation is to help its broadband business grow faster independently, the increase on the loan limit might help it allocate funds for the same.

Hathway has been looking to increase its share in the broadband market for a while now, with initiatives like Broadband Movies with Eros Now. The company has also been offering a 50 Mbps default minimum speed in the cities of Bangalore, Hyderabad, Mumbai and Pune, although with abysmally low data caps. Hopefully with this demerger, the company’s Internet business will be able to offer better and more competitive services, especially when competitors offer double the data caps with twice the speed for similar prices.

IVF’s acquisition of ACT broadband: In June this year, India Value Fund (IVF) received FIPB approval to acquire up to 100% stake in Bangalore-based Internet services provider Atria Convergence Technologies (ACT). Subsequently, in July,  TA Associates and India Value Fund Adviors (IVFA) said they would invest $500 million in ACT to acquire 95% of the company. Interestingly, IVF’s proposal had earlier been deferred by FIPB, in April and January this year.

Demerge of other ISPs: In 2011, web domain and hosting service provider Net 4 India got an approval from its board of directors, for re-organizing its business and demerging its ISP subsidiary.

TN Govt’s BharatNet: Last month, the Tamil Nadu government said it would provide Internet services including IPTV, through Tamil Nadu Arasu Cable TV Corporation (TACTV), the state’s cable TV operator as well as implement BharatNet, linking over 12,500 local rural bodies in the state.

Image source: Flickr user Thomas Hawk