Extending gains for the second day,shares of RIL and Network 18 group companies today rallied after a multi-layered deal involving the media group’s Rs 2,100 crore purchase of a part of stake from Mukesh Ambani-led corporate giant in Eenadu TV channels.
Network 18 Media and Investments shares jumped 19.61 per cent to an early high of Rs 55.50 on the BSE. Similarly,shares of TV18 Broadcast also rallied by 19.88 per cent to Rs 40.40.
On the other hand,shares of RIL,rose by 0.99 per cent to Rs 730.90.
The RIL group,through an independent trust,would provide funding to promoters of Raghav Bahl-led Network 18 group for acquiring shares in their two companies – Network 18 and TV18 – through their respective rights issues.
As per the deal,RIL would be selling “a part of the interest owned by it in the ETV Channels” to TV18.
While RIL did not specify the exact financial details of various transactions,TV18 said its board has approved an outlay of up to Rs 2,100 crore for the proposed acquisition of ETV assets.
In all,Network 18 and TV18 would raise about Rs 4,000 crore,including Rs 1,700 crore contribution of the promoters.
As per the deal,RIL,which is setting up a pan-India broadband network,would also get preferential access to content and distribution assets of the electronic media group.
RIL said it has invested about Rs 2,600 crore,through its group companies,for interest in various ETV channels,being operated and managed by Eenadu group.
After the deal,Network 18 group would get the board and management control of the ETV news channels and ETV non-Telugu entertainment channels.
However,the existing promoters and management team of Network 18 group entities would retain their control even after the RIL funding,being made through optionally convertible debentures.