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|September 24, 1999||
STAR to merge its JV assets into Zee Telefilms
In a strategic alliance, STAR TV today announced that it has signed an agreement to merge its joint venture assets, Zee TV, Zee News, Zee Cinema and Siticable into the Zee Telefilms Limited, owned by media tycoon Subhash Chandra.
STAR has agreed to transfer these assets for a total consideration of approximately $ 300 million. Half of the payment will be made in cash and the balance in ZTL shares, an official STAR TV statement released in Bombay said. The deal was signed in Hong Kong and mediated by T N V Ayyar, advisor to the Essel Group.
This transaction, however, is subject to approval of the shareholders of ZTL and the Indian laws, including rules of the Reserve Bank of India and other competent authorities.
ZTL is already in the process of integrating 50 per cent stake in Asia Today Limited through acquisition of shares from Zee Multimedia Worldwide Limited. ZTL is now looking at acquiring the other 50 per cent stake in ATL held by STAR.
As a consequence, the entire holding of ATL held through Winterhealth would now get transferred to ZTL. As part of ZTl strategy to make it a fully integrated and broadbased broadcasting, production, marketing and distribution company, ZTL will own 100 per cent stake in ATL through Winterhealth.
According to the deal, STAR has agreed to transfer its 50 per cent stake in Asia Today Limited, the company which owns the broadcasting of Zee TV, Zee Cinema and Zee News, 50 per cent stake in SitiCable and 50 per cent in Patco to Zee Telefilms Limited for a total consideration of $ 296.51 million.
Both STAR and Zee expressed happiness on this transaction, as it will put an end to all the disputes and the court cases between them.
In 1994, STAR TV acquired 50 per cent of ATL and Patco, the companies which operate the Zee Television Network. Shortly thereafter, STAR TV acquired a 50 per cent stake in SitiCable, India's largest cable system operator.
ZTL and its lead promoter Subhash Chandra have been the other joint venture partners. Today's annoucement follows Chandra's own move to merge all of his holdings into the publicly listed vehicle.
A STAR TV spokesperson said, ''We have enjoyed very profitable relationship with Chandra and ZTL. In effecting this restructuring, we expect to achieve even greater returns as the new merged entity will now be best positioned to maximise the value of these assets. We will continue to ride the growth in value creation through our continued investment in ZTL.''
The STAR spokesperson further stated that since they are converting their stake from ATL to ZTL, they would still be an important and strategic investor in ZTl and they could continue to look forward to bigger returns in the years ahead.
Zee managing director Vijay Jindal commented that this acquisition is of historic value and is happening in the countdown to the next millennium. He expressed happiness that the two partners' conviction and vision, in spite of differences in the past, have finally converged to make ZTL, India's first truly global media entertainment conglomerate.
He said that this transaction would further enhance returns on investment to the shareholders and investors. Besides, ZTL will now be a wholly Indian company in all its domains and as an Indian company, it would now be poised to tap even larger business opportunities in the emerging liberalised media broadcasting regulatory scenario in the country, he added.
The Zee spokesman said that ZTL already controls 50 per cent stake in SitiCable the distribution arm and 50 per cent stake in Patco the programme provider to Zee Cinema. The other half is owned by STAR. To further strengthen ZTL's position in programme productions and distribution, it will also be acquiring the other 50 per cent stake held by STAR in SitiCable and Patco.
Subsequent to the acquisition of equity stakes held by Zee and STAR in the upstream operations, broadcasting (ATL), downstream and ground level operations and distribution (SitiCable), and in software production and supplies (Patco), ZTL will be the first Indian company to have a total command in all the domains of integrated broadcasting enterprise.
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