Hollywood major Metro Goldwyn-Myer (MGM), US-based civil aviation and energy major having small interest in entertainment industry, Ogden, and UP-based Sahara group having media interest are three companies in the run to buy substantial stakes in the financially beleaguered TV India Ltd (TVIL), which manages the affairs of Home TV.
All the three companies have made proposals to invest between Rs 30-50 crore over the next two years in the increased capital base which is likely to go up by about Rs 100 crore from the existing Rs 150 crore. The remaining portion of the funds needed for refinancing Home TV for its relaunch will be contributed by its other shareholders.
The fresh investments in TVIL will be made through TV Mauritius, the off-shore company, and at least one of the existing foreign partners is likely to pull out to make room for the newcomer.
At present in TV Mauritius, The Hindustan Times has 30 per cent equity stake, merchant bankers Schroeders 25 per cent, UK-based Pearson plc and Carlton Communications and Hong Kong-based TVB 15 per cent stake each. In the last few days some of the shareholders of Home TV have met to discuss the proposals from MGM, Ogden and Sahara group, cable and satellite TV industry sources said, adding, the deal is likely to be finalised by December-end to be implemented by the first quarter of next year.
The sources also said UK-based Pearson plc has indicated its desire to withdraw from the joint venture as and when a new partner is found keeping in line with its global business consolidation. Pearson recently closed down its South-East Asia office and is concentrating on places like Hungary where it has won a terrestrial TV licence.
The single-largest stake holder in Home TV, The Hindustan Times, was unavailable for comments. A fax sent to HTs executive director Shobhna Bhartia last week elicited no response. It is believed that HT will also dilute its stake by about 10%.
Though there had been several other Indian and NRI-promoted companies in the fray like a South India-based consumer electronics goods major and an international steel major having interests in entertainment too, a cash-rich MGM with its vast library of TV software and films is a front-runner. MGM recently went public by getting listed at NYSE and has raised about $ 250 million from the market.
The restructuring plan, devised by Mumbai-based Nimbus Communications, at the behest of Home TV management earlier this year, aims at taking the channel to an operating break-even point in the third year from its date of relaunch.
However, the final equity structure of Home TV will depend a lot on the outcome of the proposed broadcast law and the limitations on the foreign equity, the sources said.
MGM had proposed a majority stake with few riders like changing the name of the channel to MGM -- a move proposed by the Sahara group too, but shot down by the Home TV management.
In the recent past, TVIL had been on a major cost-cutting measure and many employees, especially those associated with software production, were asked to leave Mumbai and Delhi. Home TVs chief executive, Pradip Chanda, and director (programming), Karan Thapar, had quit earlier this year plunging the company into a management crisis.
