Zee to hive off news

Mumbai, Mar 29: Announcing a major restructuring of its business, Subhash Chandra-promoted Zee Telefilms has decided to hive off its distribution and news businesses as separate entities.

The company's board, in a meeting here, approved the corporate restructing proposal to hive off news and regional language channels and the cable distribution arm as three separate companies to be listed on the stock exchanges.

The restructuring proposal, once ratified, will lead to creation of three listed companies with their shareholding proportionate to Zee shareholding.

The board also gave its nod to demerger of consumer businesses, which when approved, will create a fourth listed company. '' The proposal to demerge the consumer services business for DishTV (the DTH arm) has got in-principle approval from the board,'' a Zee release said, adding the management has been authorised to evaluate the proposal and its consequences and present to the board.

Currently, all aspects of the broadcast business like content generation, marketing, distribution and syndication, are carried out under the umbrella of Zee as different divisions.

Commenting on the development, Zee Chairman Subash Chandra said ''We feel confident that these measures of restructuring businesses subject to necessary approval would result in streamlining operations and better exploitation of opportunities in each area to build long term shareholder value.'' It would also clear the ground for acquisitions and strategic or financial partners in the demerged businesses, apart from unlocking shareholder value, he added.

Industry sources said the restructuring, which would eventually give birth to three companies, would help Zee Telefilms to unlock value for shareholders.

Restructuring of news business, the Zee chief, said, is in compliance with the October, 2005 news uplinking guidelines, following which the newsgathering activities of Zee Telefims (ZTL) were transferred to Zee News, while downlinking and commercial exploitation of all news-bearing channels was retained under ZTL.

He said ''We have felt it important to bridge the divide and bring all the operational activities together, to create strategic focus, remove tax deficiencies and unlock shareholder value.'' The news-related business (Zee News, Zee Business, Zee Bangla, Zee Punjabi, Zee Marathi, Zee Telegu and Zee Kannada (being launched soon)), will be demerged into ZeeNews Limited (ZNL), whose name is to be changed suitably, the release added.

Of cable business, Mr Chandra said, Siticable, a 100 per cent subsidiary of ZTL and its cable-related business would be de-merged into Wire and Wireless(India) Ltd (WWIL), adding simultaneously Siticable would demerge its cable business to WWIL.

Of consumer business for Dish TV, he said direct consumer-related business of ZTL will be demerged into ASC Enterprises Ltd (ASCEL), the license holder of DTH. The board has given its in-principle nod to this proposal and has the authorised management to evaluate it and its effect and present findings to the board for final approval.

The restructuring proposal would require approval of the stock exchanges, shareholders and creditors and also of Bombay High Court.

Zee News would be listed on all stock exchanges where ZTL is listed, the release said.

UNI