HT Media today said its radio business has incurred "substantial losses since inception," mainly due to low advertisement revenue, and accordingly has sought shareholders' approval for writing off part of the share capital.
As per the directive of the High Court of Delhi, its shareholders would meet on January 28 to consider the demerger of its radio business from its subsidiary HT Music and Entertainment Company and merge it with itself, HT Media said in a filing to the Bombay Stock Exchange.
"Radio business of the demerged company has incurred substantial losses since inception on account of low advertisement revenue, high brand building cost, delay in availability of common infrastructure resulting in substantial investment in transmission facilities for Delhi and Mumbai FM Radio stations... All of which have resulted in erosion of its share capital," HT Media said.
"It is therefore proposed to write-off part of the share capital which has been eroded due to accumulated losses," it added.
Further, the company added that its radio business of the demerged company is in consolidation and expansion mode and hence is likely to continue incurring losses in near term.
"This may again result in erosion of share capital of the demerged company," the filing added.
Last month, the HT Media Board had approved the demerger of radio business of HT Music and Entertainment Company (HTME), a subsidiary company and vesting thereof into HTML.
HTME operates its radio business in the name of Fever 104 FM. The radio station is a collaboration between HT Media and Virgin Radio.
Shares of HT Media were trading at Rs 70.50, down 2.22% on the BSE.
