NEW DELHI: Media baron Subhash Chandra’s Essel Group is understood to be seeking to raise as much as $500 million to fund expansion and pay debt at some of its companies.
The group may use the funds for DTH service provider Dish TV India Ltd, multi-system operator (MSO) Siti Cable Network Ltd. and schools operator Zee Learn Ltd, according to sources quoted by Bloomberg.
Essel joins Indian media companies including Network 18 Group and Living Media India Pvt. in seeking capital. It is understood that Essel has approached private equity firms for this purpose.
Dish TV, India’s biggest provider of DTH services, and Siti Cable are expanding as the nation makes digital television services mandatory. Advertisement and subscription revenue is forecast by G2Mi Research to increase 87 per cent by 2015.
“There is a heightened interest among investors in two media segments, broadcaster and cable companies, owing to a structural change that’s anticipated in the country through digitization,” Vivekanand Subbaraman, an analyst at MF Global Sify Securities India in Mumbai, told Bloomberg.
Essel is not in “active dialogue” with buyout firms, said Himanshu Mody, group head for finance and strategy, in an interview to Bloomberg. “We from time to time keep raising expansion capital for various entities within the group.”
According to the report, the money raised will not be used for Zee Entertainment Enterprises Ltd., Essel’s largest publicly traded unit. With a market capitalisation of 164.3 billion rupees ($3 billion), Zee Entertainment had 3.3 billion rupees in cash at the end of March, data compiled by Bloomberg showed.
Apart from its television business, Essel manages firms that build roads, runs a newspaper and makes packaging for toothpaste and food companies.
Dish TV had total debt of 12.1 billion rupees as of March 31 and Siti Cable, which sells cable services to about 10 million households in India, had 3.5 billion rupees of debt at the time, data compiled by Bloomberg show.
Siti Cable plans to raise Rs 3.2 billion selling warrants convertible into equity to its owners including Essel.
