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The media arm of the Adani Group, AMG Media Networks Limited (AMNL), has announced that it will be acquiring 29.18% of a national news broadcast on New Delhi Television (NDTV). Furthermore, the group will also be launching an open offer to purchase another 26% of the news company.
"This acquisition is a significant milestone in the journey of AMNL’s goal to pave the path of new age media across platforms. AMNL seeks to empower Indian citizens, consumers, and those interested in India, with information and knowledge. With its leading position in news and its strong and diverse reach across genres and geographies, NDTV is the most suitable broadcast and digital platform to deliver on our vision. We look forward to strengthening NDTV’s leadership in news delivery.” said Sanjay Pugalia, CEO of AMNL.
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However, NDTV on the other hand is not nearly as excited or happy about the news.
So, how are the two giants related?
AMNL has a wholly owned subsidiary called Vishvapradhan Commercial Pvt. Ltd. (VCPL). VCPL owns several warrants of NDTV promoter company RRPR Holding Pvt. Ltd.
Now, according to NDTV, they did not receive any intimation before such action nor were they given a chance to consent to such change in ownership.
The 29.18% stake was acquired by way of conversion of a loan agreement entered into by the founders of NDTV, Radhika and Prannay Roy, in 2009-10. VCPL voluntarily converted 19,90,000 warrants into equity shares of RRPR by exercising its option. RRPR, who's holding the group, has been informed to transfer the shares within 2 days.
Moreover, NDTV has also received a copy of the public announcement regarding the open offer to acquire 26% more in the company. VCPL, AMNL & Adani Enterprises will be launching the same. The offer is reportedly priced at Rs 294 per share, the successful completion of which would grant the Adani Group 55.18% ownership in the media giant.
The loan of Rs 400 crores which was taken in 2009-10 had legally placed the warrants in the care of VCPL. Therefore, if VCPL did exercise its rights to convert its loan to equity, it would be within legal regulations while doing so.
Investors, on the other hand, are loving the change in ownership as the share jumped 5% on Wednesday. Today, the share has jumped another 5% to trade around Rs 407.60 per share.
Article by Aman Agarwal.
This story is brought to you in association with Jobaaj.com
