Jagran brings both Radio Mantra and Radio City under one umbrella; Board of Directors have approved amalgamation of a few companies that will simplify the ownership structure of JPL
BestMediaInfo Bureau | Mumbai | October 9, 2015
The Board of Jagran Prakashan (JPL), in its meeting held on October 9, 2015 took few decisions towards simplifying its ownership structure and consolidate its radio business.
The group informed the BSE that the Board of Directors of the Company has approved composite Scheme of Arrangement for the amalgamation of Crystal Sound & Music and Spectrum Broadcast Holdings (earlier known as IVFH Holdings) with Jagran Prakashan.
The Board also approved the demerger of the radio business undertaking of Shri Puran Multimedia into Music Broadcast.
The Scheme of Arrangement is subject to the approval of shareholders, creditors and other regulatory authorities.
The amalgamation of Crystal and Spectrum into Jagran Prakashan will result in simplifying the ownership structure such that Jagran will become direct holder of approximately 93 per cent equity capital of Music Broadcast, currently which is indirectly held by it through Crystal and Spectrum. Music Broadcast, which was acquired by Jagran Prakashan in December 2014, runs Radio City FM stations across the country.
Crystal Sound is a wholly owned subsidiary of Spectrum Broadcast Holdings and holds 21.48 per cent of equity capital of Music Broadcast.
Spectrum Broadcast Holdings is a wholly owned subsidiary of Jagran Prakashan and holds 71.34 per cent capital of Music Broadcast and 100 per cent equity capital of Crystal Sound.
This amalgamation will give Jagran Prakashan a valuable right of owning and running FM radio stations in the country. Similarly, after transfer of the event management, activation, and promotional business of Crystal, Crystal will be left with no business except holding equity stake of 21.48 per cent in Music Broadcast. As such, Spectrum and Crystal are intended to be dissolved without winding up.
Consolidation of radio businesses
Demerger of the radio business undertaking of Shri Puran Multimedia into Music Broadcast would enable the latter to consolidate related business, bring cost synergies and have focussed management attention towards the business, thereby enabling better growth in revenues and profits. With this, both Radio Mantra and Radio City will come under one umbrella.
Shri Puran Multimedia is a public limited company and operates eight private radio stations under the brand name Radio Mantra. The entire shareholding of Shri Puran Multimedia is held by the promoters of the Jagran Prakashan and their family members.
Based on recommendation of Ernst & Young Merchant Banking Services, exchange ratio as consideration for the demerger and transfer of radio undertaking of Shri Puran Multimedia into Music Broadcast is 10 equity shares of Rs 10 each fully paid up for every 112 equity shares of Shri Puran Multimedia of Rs 10 each fully paid up. As a result, post demerger, shareholders of Shri Puran Multimedia shall hold approximately 6.94 per cent of equity shares in Music Broadcast.