NDTV board approves news and entertainment demerger

Televisionpoint.com Correspondent | Mumbai
At a meeting held on October 01, the board of New Delhi Television Ltd (NDTV) has approved the draft scheme of the demerger of the news businesses of NDTV into a new company.

The NDTV Group will thereby be split into two groups of companies - one group will carry out news and other businesses, and the other group will carry out entertainment and specified allied businesses.

"The aim of the demerger is to unlock shareholder value as well as provide increased choice and flexibility to shareholders. The news business and the entertainment businesses operate under very different regulatory environments." Dr Prannoy Roy, chairman, NDTV said.

After the demerger, NDTV will continue to remain listed on the BSE and the NSE, and will engage in non-news businesses. Subject to necessary approvals, the new company would also get listed under Clause 8.3.5.1 of the SEBI (Disclosure & Investor Protection) Guidelines, 2000. This new company would engage in news and allied businesses.

After the demerger, for every one share currently held in NDTV Ltd, a shareholder will receive one share in new company: For every share of face value of Rs 4 currently held in NDTV Ltd, a shareholder will receive a share of face value Rs 4 in the company that will acquire the news businesses of NDTV Ltd as part of the demerger. At the same time the shareholder will continue to hold his current Rs 4 share in NDTV Ltd.

"Suitable arrangements will be put into the terms of the scheme for the ownership and use of the very valuable brand of NDTV. Arrangements for the ownership and use of common assets will also form part of the scheme." Roy says.

As part of the Scheme, certain undertakings and guarantees provided by NDTV Limited will be undertaken by both the companies after the de-merger. The appointed date for the scheme would be April 01, 2009.