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Hathway completes transfer of cable TV biz to wholly owned subsidiary
MUMBAI: Hathway Cable & Datacom has completed the transfer of its cable TV business to its wholly owned subsidiary, Hathway Digital Pvt Ltd. The broadband business will remain in the parent company.
The company has no plan yet of listing the subsidiary company separately
The transfer of the cable TV business by way of slump sale to Hathway Digital (formerly known as Hathway Datacom Central Pvt Ltd) has been completed as of 31 March 2017.
In January, the board of Hathway had in a surprising move decided to transfer its cable TV business by way of a slump sale to a wholly owned subsidiary company. This was a reversal of its earlier plan of hiving off its broadband business to a subsidiary company called Hathway Broadband.
Explaining the rationale, Hathway had said that, as broadband was the primary growth driver of the business, it was preferable to retain the potentially more profitable business in the parent entity.
“Public investors will benefit from direct stake in the parent entity housing the high growth potential business. Transfer of the cable business to the wholly owned subsidiary would retain the value within Hathway Cable & Datacom,” the company had stated.
It had also stated that the consolidation would result in reduction of costs and bring about operational rationalisation. There would also be reduction in inter-company transactions.
Hathway withdrew the demerger scheme of its broadband business into Hathway Broadband.
The board had also given in-principle nod to five subsidiaries of the company to spin off their respective cable TV business into the subsidiary company.
Explaining the rationale for the separation of businesses, Hathway said that this would enable focused attention to each of them. “It will create independent structures for future fund raising,” the company explained.