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DEN, Snapdeal exit tele shopping biz, sell stakes to Pimex Broadcast
MUMBAI: Multi-system operator (MSO) DEN Networks and Jasper Infotech, the owner of embattled e-commerce platform Snapdeal, have exited the TV home shopping business by selling their entire shareholding in TV home shopping company Macro Commerce to Pimex Broadcast for Rs 10 lakh.
The move comes as both DEN and Snapdeal want to put their focus on their core businesses of cable/broadband and e-commerce respectively.
The exit of DEN and Snapdeal was inevitable considering that the tele shopping business is still in its infancy and requires huge capex. Major players like Shop CJ and Homeshop18 are incurring huge losses even after being in the market for a long time.
The MSO, which is the majority shareholder in the TV shopping business DEN Snapdeal TV Shop, has entered into a share purchase agreement (SPA) with Pimex Broadcast for selling off its entire equity stake in Macro Commerce on a going-concern basis.
Thus, Pimex will hold 100% shareholding of Macro and will be taking over all existing liabilities and dues. The name of DEN and Snapdeal will be dropped off from the branding.
Pimex is promoted by Vijender Singh, who has over 15 years of entrepreneurial exposure and is currently driving the technology initiatives and product R&D roadmap for Pantel Technologies and Pimex Broadcast.
DEN has already made provisions for its investment in Macro in its books of accounts in the previous financial year, which is why there will be no further impact on the profit and loss account.
Macro Commerce, which started as an equal JV between DEN and Snapdeal, owns and operates TV home shopping channel DEN Snapdeal TV Shop.
The entity was constituted for setting up a television channel to be used as a marketplace for facilitating the sale of branded and unbranded merchandise.
Interestingly, the move comes 11 months after the MSO had become a majority shareholder in Macro Commerce by acquiring 32.87% from Snapdeal owner Jasper Infotech to take its total holding to 82.87%.
The MSO had acquired the additional stake for Rs 6 crore, which included purchase of shares for Rs 1 crore and subscription by way for rights issue for Rs 5 crore.
Macro Commerce had narrowed its net loss in FY17 to Rs 1 crore from Rs 23 crore in the year-ago period. The company’s revenue had jumped to Rs 26 crore from Rs 14 crore. From FY17 Q2 onwards, DEN had consolidated TV commerce results. Until FY17 Q1, Macro Commerce was considered as an associate company.