Reliance Industries to sell off 3.1% stake in Network18

Reliance Industries has announced it plans of selling 3.1% of its stakesin the media and entertainment company, Network18 Media and Investments Ltd. to bring down its stakes at 75%.

Reliance Industries had obtained a major stake in Network 18 and its subsidiary TV18 Broadcast Ltd., last year, making it the largest deal in India’s media industry. It paid Rs. 4,000 croresto Independent Media Trust (IMT) to bag the holding. Its promoter shareholding by the end of Financial Year 2014- 2015 was 78.1%.

The company has now decided to reduce its stake to adhere to Security and Exchange Board of India’s (SEBI’s) rule stating that promoter holding should be of 75%. Promoter group company, Shinano Retail Pvt. Ltd. will be selling 3.25 crores shares for this, through the stock exchange. Shinano Retail is wholly owned by Reliance Industries. The sale of shares will start from 8th of July. It is anticipated that the deal will be of more than Rs. 200 crores.

Statement from Reliance Industries

In a statement, the company mentioned that it is “proposing to sell 3.25 crores shares of Network18 Media &Investments Limited (representing 3.10% of the equity capital) to bring down the aggregate shareholding of the promoter and promoter group to 75% and increase the public shareholding to 25% as mandated by Clause 40A of the listing agreement pursuant to Securities Contract (Regulation) Rules, 1957.”

Earlier ventures of Reliance Industries and Network18

The two companies came together in January 2012 for a multi-layered deal. As per the deal, Reliance Industries sold some of its interest in ETV channels. The company then got access to content and distribution assets of the electronic media group.

In December, last year, IMT opened offers for three Network 18 group companies.Its parent company, Reliance Industries bought shares worth Rs. 17 crores.IMT obtained 54.14 lakh shares forRs. 16.34 crores of TV18 Broadcast and 2.60 lakh shares for Rs. 1.06 crores of Network 18 media. In the third offer, the company bought more than 15 lakh shares for Rs. 45.9 lakh. The offers began on 3rd December, 2014 and closed on 16th December, 2014.The capital was used by IMT to gain control on Network18 and TV18. The acquisition resulted in IMT to get control of around 78% in Network18 and 9% in TV18.

The open offer was made so that 22,99,46,996 equity shares of Network18 equaling 21.96% stakes worthRs. 943.70 crores could be acquired. The second offer was to acquire 44,65,10,110 equity shares equaling 26% stakes of TV18 worth Rs. 1,347.57 crores. The last offer was for the acquisition of 1,30,62,224 equity shares, that is 26% stakes of Infomedia worth Rs. 3.92 crores.

The Network 18 Group is spread across television, movies, internet, magazines, e-commerce, mobile content, etc. The varied portals under this banner are firstpost.com, moneycontrol.com, bookmyshow.com and homeshop18.com. Its broadcast channels are Colors, IBN7, CNN-IBN, CNBC Awaaz and CNBC TV18.

Summary

Reliance will be selling 3.1% of its stake in Network18 Media to bring it down to 75%; thus complying with SEBI norms.

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