Press Releases2010Apr 30, 2010
ZEEL board approves swap ratio for 9X acquisition
The Board of Directors of Zee Entertainment Enterprises Limited (ZEEL) approved the Scheme of Arrangement between the Company and INX Media Private Limited (INX) for the demerger of '9X' General Entertainment Channel Business Undertaking from INX and vesting into the Company. The proposed acquisition would be funded by issuance of new shares by ZEEL to shareholders of INX and the share swap ratio has been proposed at 1 (one) equity share of Rupee 1/- each of ZEEL for every 71 (seventy one) equity shares of Rupees 10/- each of INX held by the shareholders of INX, as on June 30, 2010. ZEEL would also take over liability of Rs 600 million.
The Board of Directors of the Company had in an earlier meeting on April 20, 2010 granted an in-principle approval for the acquisition of '9X' General Entertainment Channel Business Undertaking from INX by way of Scheme of Arrangement under which the 9X Channel Business Undertaking will be demerged from INX and vest with the Company, subject to appropriate statutory and regulatory approvals. In its meeting held today, the Board considered and approved the Scheme of Arrangement between ZEEL and INX under the provisions of Section 391-394 of the Companies Act, 1956.
The process has been based on the valuation report submitted by independent valuer M/s Mittal Goel and Associates, Chartered Accountants. The appointed date for the Scheme of Arrangement will be March 31, 2010 and the scheme is subject to necessary approvals from the shareholders, creditors and regulatory authorities including the Stock Exchanges and the Bombay High Court.
Commenting on the acquisition, Subhash Chandra, Chairman of ZEEL, stated Zee Entertainment is a leading provider of entertainment content across genres. With this acquisition, we hope to be able to expand our presence in the Hindi GEC space. We would also explore the opportunity to take this content to our international markets. This move is part of our continuing efforts to improve long-term shareholder value.
Punit Goenka, CEO of ZEEL said While Zee has a dominant presence in the Hindi GEC genre, we have been looking at an opportunity to add to our offering and create better value. This acquisition would allow us a good opportunity to exploit better synergies across the entertainment genre. We would continue to operate the channel under the 9X brand and look at improving connect with our viewers.
Post the acquisition and the issuance of new shares of ZEEL to INX, the equity shares count would go up by 140,845 equity shares of Rupee 1/- each. The fully diluted equity capital after the Regional General Entertainment Channels (R-GEC) business acquisition, Scheme of allotment of ETC Networks and the proposed acquisition of '9X' General Entertainment Channel Business Undertaking would go up to 489.04 million.