Television Eighteen has increased its stake in CNBC TV to 90 per cent from 49 per cent, thereby becoming the majority stake holder in the business channel.
As per the new arrangement, CNBC Asia Pacific will hold only a 10 per cent strategic stake in TV18's unlisted channel broadcast subsidiary. With TV 18 becoming a majority stake holder it will be cash neutral for the company.
Both TV 18 and CNBC AP concluded their arrangement on Wednesday which is now in keeping with the new government guidelines for news channels.
"The shareholders will now have a 90 per cent stake in the success of CNBC-TV18. We also ensure that CNBC-TV18 continues to flourish as India's premier business news broadcaster," Raghav Bahl, managing director, TV18, said.
According to a news release from the company, apart from the 10 per cent strategic stake, the arrangement also includes a definitive 15-year franchisee arrangement for the CNBC brand.
The entire arrangement is subject to obtaining requisite regulatory approvals, the statement said.
The channels operations will be hived off by TV 18 and merged into its existing unlisted subsidiary iNews.com and CNBC AP shall pick up a 10 per cent stake in this Indian registered entity.
Necessary approvals from shareholders and regulators for implementing this structure will be sought shortly.
The statement also said TV18 has budgeted an extraordinary, non cash restructuring charge of Rs 15 crore (Rs 150 million) in relation to its existing Mauritius subsidiary.
Being an intra-group transaction between TV-18 and its 100 per cent Mauritius subsidiary, the restructuring will not have any material impact on the overall financial position of TV-18.
The final restructuring plan is being drawn up with the assistance of Ernst & young who also acted as advisors on the deal.
The share price of TV18 on the Bombay Stock Exchange increased by 3.74 per cent from its previous day's close to Rs 115.25. A total of 127,000 shares changed hands on the exchange on Wednesday.
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