New Delhi:The Board of Directors of HT Media Limited (HTML) at its meeting held recently has approved the sale/transfer of its “Hindi Business Undertaking” to Hindustan Media Ventures Limited, a subsidiary company, of which 99.3% is owned by HTML. The transaction shall be effective from December 1, 2009 (opening).
As part of this transaction, the ‘Hindi business’ of HTML comprising of ‘Hindustan’, the Hindi daily; Hindi magazines, ‘Nandan’ & ‘Kadambini’, and the internet portals of these publications, including all assets, liabilities and employees pertaining to this business, will be transferred to Hindustan Media Ventures Limited on a ‘slump sale’ and ‘going
concern’ basis. The transfer will be on ‘Book Value’ of the business as on November 30, 2009 (closing).
The lump-sum cash consideration towards the proposed sale would be Rs. 149 crore including net working capital of Rs. 24 crore. The net working capital shall however be adjusted and transferred as per the actual books of accounts audited by the Statutory Auditors, as on 30th November, 2009.
All relevant Intellectual Property Rights and Brands shall be used by Hindustan Media Ventures Limited Company (transferee) on a long-term lease basis with first right of refusal to purchase.
Transaction in line with Company’s stated business objectives This proposal is in line with HT Media’s objective of strengthening its Hindi business by expanding presence and penetration across the Indo Gangetic belt. The Company has
consistently reiterated its belief in the growth potential of vernacular business. By becoming a stand-alone entity, it will bring greater focus to the Hindi business and help investors track the growth of the Company in line with the expansion in the rural economy. It will also lead to better benchmarking of performance of the business with its peers. In addition, with a separate company for ‘Hindi business’, it will be easier to pursue consolidation opportunities in the regional print media space.
In Q2 FY 2010, the Hindi business reported revenues of Rs. 1,026 million, operating profits of Rs. 208 million translating to operating margins of 20%.