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Nagesh Chhabria’s pan India cable TV venture awaits restructuring of funding company

MUMBAI: Former IndusInd Media & Communications (IMCL) CEO Nagesh Chhabria will have to wait longer to raise capital to fund his ambitious plan of setting up a pan-India cable TV network.

Already present in pockets of India through his company Bhima Riddhi Digital Services (BRDS), Chhabria was banking on a Rs 1,200-crore investment (Rs 12 billion) from a US-based private equity firm and a domestic company owned by Sanjiv Mohan Gupta.

The capital was to be funnelled through a joint venture company floated by US-based Greenwich Equity Partners and Gupta’s Jagran Infra-Projects. Atlas Consolidated LLC, the JV company, would invest in the cable TV and media space.

Nagesh Chhabria

Nagesh Chhabria

Chhabria has received no money yet since the announcement on 16 July this year. While some critics have raised holes in the deal, the cable TV entrepreneur is confident that the funds would flow in.

“There is some restructuring happening at their end. I am expecting the whole thing to settle by February 2015,” Chhabria told TelevisionPost.com.

With the Indian stock market remaining buoyant, Gupta wants his listed entity, Jagran Production Ltd, to participate in the venture. Moving away from the original plan of Jagran Infra-Projects participating in the JV, it is now being designed that Jagran Production would step in.

Based on the JV’s earlier proposal to invest an ambitious Rs 1,200 crore in Chhabria’s BRDS to create a nationwide multi-system operator (MSO) entity in India, Jagran Production is seeking the approval of its board to transfer the cable business from Jagran Infra-Projects to itself.

Incidentally, Atlas had earlier signed an agreement with Chhabria. As part of the deal, Chhabria is to bring his cable TV assets into the new company. BRDS has a subscriber base of one million spread across Maharashtra, Karnataka and Goa.

The transfer of the special-purpose vehicle (SPV) of the cable TV business from Jagran Infra-Projects will mean that Jagran Production will participate with Atlas Consolidated LLC on an active basis to deploy Rs 1,200 crore into the MSO business.

The board of Jagran Production was to meet on 25 November to consider the transfer of the SPV proposal, but the meeting had to be adjourned as there was no proper quorum of the board.

Jagran Production is a small-sized company. In FY14, the company reported a revenue of Rs 11.36 crore (Rs 113.58 million) while its net profit stood at Rs 0.06 crore. In the first quarter of this fiscal, revenue has grown to Rs 30.10 crore (Rs 301 million) and net is at Rs 0.27 crore.

Chhabria is keen to swing into expansion mode. “I will soon be getting into Kolkata and Delhi so that I will have a cable TV presence in the metro cities,” he said.

Raising capital will be crucial to any major expansion plans that Chhabria has. Deploying set-top boxes (STBs) and setting up a digital infrastructure requires massive capital infusion.

While national MSOs like Hathway Cable & Datacom have been able to raise capital, it has been tough going for the smaller players. With the government extending the sunset date for analogue cable TV to 31 December 2015 in case of Phase III and a year later for Phase IV, the fund-raising programme has got deferred for some of the MSOs who were seeking new capital to grow.

Also read:

Atlas Consolidated in $200 mn JV with former IMCL CEO Nagesh Chhabria