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Zee Media to acquire 80% of TMPL for Rs 153.5 cr, TV Today to be issued CCDs

MUMBAI: Zee Media Corporation Ltd (ZMCL), which is acquiring 80% stake in India Today Group-owned Today Merchandise Pvt Ltd (TMPL), will have TV Today Network as a minor partner.

TV Today Network, which runs a clutch of news channels, will be issued compulsory convertible debentures (CCDs) of TMPL worth Rs 12.5 crore (Rs 125 million) in exchange for the advertisement support it extends to the company. Such CCDs can be converted into equity shares after the expiry of five years from the date ZMCL has invested in TMPL.

TV Today has agreed to provide ad support of Rs 12.5 crore to TMPL from the date of ZMCL’s investment. This means that TV Today will commit ads worth Rs 2.5 crore (Rs 25 million) each year over a period of five years. This will be in the form of publishing, exhibiting or advertising the promotional material as specified by TMPL in the electronic properties owned by TV Today.

Living Media India Ltd (LMIL), the holding company of TV Today, will also provide ad support of Rs 37.5 crore (Rs 375 million) over five years to TMPL.

Meanwhile, ZMCL is acquiring for Rs 153.53 crore (Rs 1.54 billion) 80% per cent stake in TMPL, a wholly owned subsidiary of LMIL that has been developing infrastructure for the launch of a TV shopping channel.

ZMCL had announced earlier that it would be acquiring 80% stake in both TMPL and Today Retail Network Pvt Ltd (TRNL) for Rs 165.78 crore (Rs 1.66 billion) in tranches spread over four years. So, is it that TRNL will account for Rs 12.25 crore (Rs 122.5 million)?

Besides developing infrastructure for a TV shopping channel, both TMPL and TRNL are involved in operating an e-commerce website, www.bagittoday.com, to complement this line of business. LMIL is an India Today Group entity.

ZMCL, on its part, will invest Rs 153.53 crore in TMPL over a period of four years through equity shares and CCDs. By June, it will acquire 49% stake in TMPL by investing Rs 36.87 crore (Rs 368.7 million) at par value.

Subsequently, ZMCL will increase its stake by investing up to Rs 116.66 crore (Rs 1.17 billion) over four years, subscribing for any security convertible into equity shares of TMPL, at par value so that upon conversion, the shareholding of Zee shall be 80% of fully diluted capital of the company.

Founded on 23 November 2010, the loss-making TMPL achieved turnover of Rs 3.84 crore (Rs 38.4 million), Rs 5.25 crore (Rs 52.5 million) and Rs 5.11 crore (Rs 51.1 million) in FY15, FY14 and FY13 respectively.

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