Citicorp to buy 8.27% in HT for Rs 69 crore

Citicorp investment values the media firm at Rs 834 crore.

Citicorp International Finance Corporation is picking up an 8.27 per cent stake in HT Media Ltd, which publishes the Hindustan Times, for Rs 69 crore. The investment will happen in two tranches of Rs 46 crore and Rs 23 crore.

According to HT Media's application filed with the Foreign Investment Promotion Board, Citicorp will pay Rs 195.19 per share for its stake in HT Media.

Henderson Asia Pacific Equity Partners had paid Rs 175 per share to acquire a 15.38 per cent stake in the company in February. The Australian company had transferred its stake to HPC Mauritius in September.

The acquisition had cost Henderson Asia Pacific Equity Partners Rs 100 crore, which gave HT Media a valuation of Rs 650 crore. The Citicorp investment puts the company's valuation at Rs 834 crore. Thus, the valuation of HT Media has improved by Rs 184 crore, or 28 per cent, in the last eight months.

In a separate deal, HPC Mauritius will increase its stake in the company to 16.37 per cent for Rs 25 crore from the present 15.38 per cent. Henderson Asia Pacific had got the government's approval to buy up to 19.23 per cent in HT Media.

The present proposed investment by HPC Mauritius will be done at a price of Rs 195.19 per share. This money, too, will come in two tranches of Rs 10 crore and Rs 15 crore.

Along with the first tranche of investment by the foreign partners, the KK Birla group, the Indian promoters of HT Media, will also invest Rs 15 crore in the company.

This deal will take the foreign shareholding in HT Media to 24.64 per cent and will bring down the promoter's holding to 75.36 per cent. Government rules permit foreign investment of up to 26 per cent in a newspaper company.

Subsequent to the investment, the HT Media board will be restructured. In the new board of nine, five directors will be nominated by the Indian promoters, one each by HPC Mauritius and Citicorp, while there will be two independent directors, who will be Indian nationals.

As per the agreement, the directors nominated by HPC Mauritius will not have any say in the running of the company on matters pertaining to editorial content or matters concerning editorial staff.

Moreover, the positive vote of the directors nominated by the two foreign companies will not be required for appointment of executives and editorial staff.