Anil Ambani-led Reliance ADAG is also learnt to be in talks to offload up to 49% stake in RBNL’s radio business ‘Big FM’
BestMediaInfo Bureau | Delhi | February 25, 2016
In a bid to reduce debt on its books, Anil Ambani-led Reliance ADAG is in talks with Zee Entertainment Enterprises (ZEEL) to sell off its television business under the Big Magic banner and offload its stake up to 49 per cent in Reliance Broadcast Network (RBNL) that runs the Big FM radio network covering 45 cities and has added 14 stations in the recently concluded FM Phase III e-auctions. This was confirmed by a senior executive in the group on condition of anonymity.
Among the media business verticals of the group, RBNL has a lion’s share valued at around Rs 2,500 crore, according to a media report. After the government hiked FDI limit in radio to 49 per cent from 26 per cent in November last year, Reliance ADAG began scouting for private equity (PE) firms to sell its stake and talks with select PE firms are said to be in an advanced stage.
The executive denied any possibility of a complete sell-off of RBNL, arguing that it is technically not possible after participating in the FM Phase III auctions. According to the Phase III guidelines, once the grant of permission agreement (GOPA) is signed and the company is in Phase III, the majority ownership cannot change till April 1, 2018, that is, a lock-in of three years.
Industry analysts aver that one way out of the lock-in period roadblock in selling off the Big FM business is to go in for a “structured deal”. There have been is instances in the past of similar deals in the broadcast media industry. Market observers expect the deal to be finalised by March, though BestMediaInfo.co does not have any confirmation on this.
It may be pertinent to note while Zee Group is present in television and print media, it has no presence in radio.
The senior executive said that the company’s primary focus was on bringing investments for the radio business.
RBNL’s television business includes Big Magic, Big Magic Ganga, Big Magic International, Big Thrill and Big Productions.