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ENIL to acquire four Oye FM non-metro stations for Rs 4 cr
MUMBAI: Entertainment Network (India) Ltd (ENIL), the operator of Radio Mirchi, will be shelling out Rs 4 crore (Rs 40 million) to acquire four non-metro FM stations of TV Today Network’s Oye FM.
TV Today entered into a binding business transfer agreement with ENIL today for sale of Oye FM radio stations in Jodhpur, Amritsar, Patiala and Shimla.
Moreover, ENIL will pay migration fees to the Ministry of Information & Broadcasting (MIB) for migration of the stations from Phase II to Phase III.
According to TV Today, the deal is subject to closing net working capital adjustments and fulfilment of conditions specified by the MIB, execution of relevant documents, and completion of all other relevant formalities.
The buyout will be undertaken on a slump sale basis.
TV Today disclosed that during the financial year 2014–15, the total turnover of the four non-metro stations stood at a mere Rs 3.96 crore (Rs 39.6 million), equivalent to 0.80 per cent of the total turnover of the company.
Overall, the radio business revenue was at Rs 15.48 crore (Rs 154.77 million) and generated a loss of Rs 9.28 crore (Rs 92.8 million) during the fiscal.
Incidentally, in February this year ENIL had entered into a non-binding MoU (memorandum of understanding) with TV Today to acquire the latter’s seven radio stations. However, because of an overlap with Radio Mirchi stations in Mumbai, Delhi and Kolkata, the MIB did not give its nod, following which TV Today had moved the Delhi High Court.
Later, the ministry allowed the sale of four stations as Phase II guidelines do not allow an entity to have more than one frequency in a city, while migration to Phase III stipulates a three-year lock-in period.
While these four stations will take ENIL’s total station count to 36 from 32 at present, the radio company is not going to give up on the three metro stations of Oye FM. ENIL MD and CEO Prashant Panday had earlier told TelevisionPost.com that the company would continue to try to persuade the ministry for approval for the remaining stations as well.