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Dish TV-Videocon d2h merger deal back on track

MUMBAI: After a temporary setback, the merger deal between direct to home (DTH) operators Dish TV and Videocon d2h is back on track.

In a filing to the BSE, Dish TV has said that it “intends to take further steps for effecting the said merger”.

As part of the amalgamation scheme, Dish TV and Videocon d2h will file the relevant intimations/E-Forms with the registrar of companies (ROC), ministry of corporate affairs (MCA) in the last week of February 2018.

The filing date shall be the effective date for the scheme.

On 11 January, Dish TV had said that it is evaluating whether insolvency proceedings against promoters of Videocon Group will have an impact on its rights and obligations under its agreement with Videocon d2h.

Dish TV had asked its advisors to the transaction to evaluate the position and advise the company with its findings within a period of 60 days.

Before this sudden development took place, the two DTH companies were expected to file the relevant intimation/E-Forms with the RoC, MCA, Maharashtra, Mumbai, by 27 December 2017. However, the filing got delayed after Dish TV got to know about the insolvency proceedings against Videocon d2h promoters.

Dish TV also said that the merger deal is being taken forward after receiving a go-ahead from the advisors. “Upon evaluation of the above circumstances by the Advisors to the Scheme, the Company shall be taking necessary steps for completion of the Scheme,” it added.

For the purpose of seamless integration of the businesses of Videocon d2h into Dish TV India and for synchronising the operations of two companies to derive the benefits and objectives of the scheme, Dish TV has nominated two Directors namely Amitabh Kumar and Raj Kumar Gupta on the board of Videocon d2h.

Amitabh Kumar has an experience of over 30 years in the Media & Telecom field and Raj Kumar Gupta has an experience of over 35 years in the Financial & Accounting field.

On 15 December, the ministry of information and broadcasting (MIB) had approved the merger between the two companies.

Commenting on the merger deal, Dish TV India CMD Jawahar Goel said, “We acknowledge our shareholders growing impatience with respect to the merger. We would like to assure them that work around the completion of the deal is going ahead with full steam now and should be completed soon.”

“We are excited about the future of the merged entity and are raring to put the business in overdrive as soon as the merger completes. Though we have lost some time in FY18, we would want to regain our leadership as well as extract the highest possible synergies in the year ahead,” Goel added.

In November 2016, Dish TV and Videocon d2h had decided to merge to create a distribution behemoth.

The merged entity Dish TV Videocon would have a whopping 29 million subscribers in India as per its combined share on 30 September.

As per the transaction, Dish TV Videocon will issue 857.79 million fresh shares as a consideration with Videocon d2h shareholders getting 2.02 shares in Dish TV Videocon for every 1 share.

Post-closing, Dish TV shareholders will own 55.4% of Dish TV Videocon and Videocon d2h shareholders will own 44.6%. The merged entity will be the second largest listed media company after ZEEL with revenues of Rs 60.8 billion.

It will also become the second largest distribution platform in the world. The merged entity will have 16% share of the TV distribution market. The merger synergy will result in cost savings of Rs 1.8 billion in FY18 and Rs 5.1 billion in FY19.