CNN-IBN buys 50% in Channel 7 for Rs 60 cr

11th February 006; Global Broadcast News, which owns English news channel CNN-IBN, has acquired 50 per cent stake in Channel 7, a Hindi news channel promoted by Jagran TV Private Ltd, for about Rs 60 crore in an all-cash deal.

This marks the start of consolidation in the crowded Indian news broadcasting market, which at present has about 30 players fighting for an advertisement pie of about Rs 600 crore.

According to company sources, with this acquisition, CNN-IBN, which has a market share of about 30 per cent in the English news space, will make inroads into the Hindi news market. Channel 7 has about 7 per cent market share in the Hindi news broadcasting space.

According to market observers, this move by CNN-IBN will give it a bouquet of television channels for cross promotion and target audience.

“Channel 7, while complementing the ‘CNN-IBN’ bouquet, will benefit from the combined strengths of two media groups,” said Ravi Sardana of ICICI Securities.

However, Prannoy Roy, chairman and managing director, NDTV, the biggest competitor for CNN-IBN and Channel 7 combine, refused to comment on the deal and how it would affect the company.

“With such a powerful 4-channel bouquet of market leaders -- Channel 7, CNN-IBN, CNBC-TV18, Awaaz -- straddling the entire spectrum of general and business news in English and Hindi languages, the TV18 group will become the leader among India’s news broadcasters,” said Raghav Bahl, managing director of TV18 which owns the majority stake in GBN.

This strategic investment is expected to be completed over the next 60 days, subject to regulatory approvals. According to sources, at a later stage the two channels might also look at synergy in branding of two channels.

Indian Charge Chrome Ltd (ICCL) to merge with Indian Metal and Ferro Alloys Ltd (IMFA) at 14:1 ratio

9th February 2006: ICCL, one of the country's biggest ferro-chrome companies, is going to be merged with its parent company IMFA. The merger will be at a share swap ratio of one share of IMFA for every 14 shares of ICCL.

The ICCL managing director, Subrakanta Panda, told FE on Wednesday that the company boards of both the IMFA and ICCL have accorded the approval for the merger. "The appointed date of the merger is April 1, 2005 and the scheme is subject to the approval of the Orissa High Court," he said.

Mr. Panda said that the merger process is expected to be completed in 3-4 months time and IMFA will be immediately listed in selected bourses in the country.

IMFA, which has a total installed capacity of 82 MVA of producing ferro chrome and ferro silicon, is a closely holding company of Panda families of Orissa. ICCL, which has a 48 MVA ferro chrome furnace and a 108 MW captive power plant, has over 50,000 shareholders with 15% public holdings including banks and financial institutions. Currently, ICCL stock, listed in Bombay Stock Exchange (BSE) is traded at Rs 11 with a recent high of Rs 29.

The merger is a part of the debt-restructuring package for the ICCL allowed by the term lenders led by the IDBI. ICCL, an IMFA group company, defaulted on its debt due to delay in allotment of captive chrome ore mines, and adverse market conditions.

The company boards of IMFA and ICCL, which met early this month at Mumbai, has accepted the joint report of the KPMG India Pvt Ltd and the NM Raiji & Co, where the swapping ratio has been fixed at 1 share of IMFA for every 14 shares of ICCL.

Claiming that the IMFA-ICCL merger scheme of agreement envisages a clear-cut and specific steps for the protection and benefit of minority shareholders, Mr Panda said that the term lenders have agreed to reduce the extent of de-rating of existing equity from 95% to 50% with the caveat that only minority shareholders will benefit from this concession. Accordingly, promoters will pay term lenders the notional gain pertaining to their shareholding arising out of the reduce de-rating. The management has agreed for cancellation of interest free advance of Rs 55.65 crore from IMFA to ICCL instead of converting it into equity. Shareholding in the merged entity arising out of IMFA's present equity holding in ICCL, which will be about 4% equity in post-merger IMFA, will be distributed to only minority shareholders at a minimum discount of 50% to the market price.

The proceeds will accrue to the company and shall be used to accelerate repayments to term lenders.

Indian Oil Corporation (IOC) alters IBP swap ratio

29th December 2005: The board of directors of Indian Oil Corporation (IOC), which met, approved a proposal to note the advice of the central government, and recommended a revised swap ratio of 110:100 i.e. 110 equity shares of Rs 10/- each of the company for every 100 shares of Rs 10/- each of IBP.

According to a release issued by IOC to the BSE today, "it may be noted that being a government Company, prior approval of the government is necessary before any merger or acquisition."

The boards of IOC and IBP had earlier agreed upon a swap ratio of 1.25:1 i.e. 125 shares of IOC for every 100 shares of IBP.

"The government, vide their letter dated December 26, 2005, has accorded approval to the scheme with the advice that the board of directors may re-consider the swap ratio under different valuation scenarios," the release added.