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UTV-Disney, a formidable pairing

By Staff
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Google Oneindia News

Mumbai, Feb 18 (UNI) In one of the largest media and entertainment foreign investments into India, the Walt Disney Company (South East Asia) (TWDC), a subsidiary of the Walt Disney Company, will invest approximately Rs 805 crores (USD 203 million) into UTV Software Communications (UTV).

Speaking to reporters today, UTV Chairman and Managing Director Ronnie Screwala said, ''This partnership across movies, TV content, interactive and broadcasting endorses our leadership position in India and South East Asia and propels our already growing global story.

Over the last years, we have learnt to work well together and the speed at which this collaborative deal was put together is testament to the strong working relationship we have built.'' TWDC will also invest with UTV in UTV global broadcasting (UGBL) by acquiring a 15 per cent stake worth Rs 119 crores (USD 30 million). TWDC's investments in UTV and UGBL together warrants to be issued to Ronnie Screwala's promoter group, of Rs 390 crores, after exercise the total deal size is of about Rs 1314 crores (USD 330 million).

The transactions will be done through preferential allotment to TWDC and the promoters, as per the SEBI regulations it will require a public announcement to all UTV shareholders. The investment and the open offer are subject to shareholder and regulatory approvals.

This investment further establishes TWDC's entry into the Indian market and compliments the fast growing Disney branded businesses and long held joint ventures in ESPN STAR Sports. As result of this investment TWDC's stake in UTV will go up from 13.7 per cent to 32.1 per cent on a fully diluted share capital basis. The number of shares expected to be issued as part of the transaction are 9,352,500 at a price of Rs 860.79. This is based on SEBI preferential allotment pricing formula with a 5 per cent premium.

Meanwhile, TWDC will invest approximately Rs 119 crores (USD 30 million) for a 15 per cent stake in UGBL. UTV will also invest Rs 240 crores (USD 60 million) for a 75 per cent stake in UGB, the parent company for its two wholly owned subsidairies Genx Entertainment and UTV Television The remaining 10 per cent will continue to be held by Ronnie Screwala's Promoter Group.

UNI LS AA/SR SKB1556

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