 "Bahl to continue on Network18 board, Deepak Parekh also to join in")
Nominees of IMT, Deepak Parekh, chairman, Housing Development Finance Corporation, and Adil Zainulbhai, senior advisor, McKinsey India, who has been inducted as an independent director on the board of NW18 will join Bahl on the board.
In May, the RIL board had approved funding of up to Rs 4,000 crore to IMT to acquire majority stake in Bahl's Network18. The acquisition has been long in the making and seeds for the deal were sown two years earlier when RIL, through IMT, lent a debt-ridden Bahl Rs 1,700 crore to retain his stake in Network18 and TV18.
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The companies had decided to go for an open offer to raise funds to the tune of Rs 4,000 crore to retire debt and buy varying stakes in the regional channels of the Hyderabad-based Eenadu network.
To maintain promoter stake in the company, Bahl needed Rs 1,700 crore, lent to him by IMT (indirectly by RIL) through optionally convertible debentures. As part of the deal, a memorandum of understanding (MoU) was signed between RIL’s broadband subsidiary, Infotel, and the Network18 Group, which would give it ‘preferential’ access to all the web and media properties of the media network of Bahl.
As a consequence of the takeover, NW18 saw the exit of senior management executives including group Chief Executive Officer B Sai Kumar, Chief Operating Officer Ajay Chacko and Chief Financial Officer R D S Bawa.
Bahl had also stepped down from his position as managing director, but communicated to his team-mates that he would continue to be with the company to ensure a smooth transition.
With the completion of this transaction, IMT and RIL have become promoters of NW18 and TV18, said RIL.
The open offers to the public shareholders for acquisition of equity shares of NW18, TV18 and Infomedia Press as announced on May 29 are in process and the draft letter of the offer has been filed with the Securities and Exchange Borad of India for its comments.