Essel Group Chairman Subhash chandra (File photo)
Less than a month after Zee Entertainment Enterprises Limited (ZEEL) MD and CEO Punit Goenka denied any interest in buying the radio and television business under Anil Ambani’s Reliance Broadcast Network Limited (RBNL), reports suggest that the two companies
may have restarted talks of a buyout.
The two companies
first began negotiations at the start of 2016, when RBNL decided to monetise its stake in the company. Reliance ADAG, the parent company of the broadcast and radio network, has been consciously divesting interests in media assets in order to focus on businesses like telecom and defence.
In March, it was reported that apart from ZEEL, PE’s like Samaira Capital and Providence were also in the running to pick up at least 40 per cent in RBNL. At the time, sources close to the development revealed that Zee may not be keen on investing in the company unless it has controlling stake, which seemed improbable then.
Later, Goenka clarified that since more than 49 per cent of ZEEL is owned by foreign investors, the current regulations in radio ownership do not allow the company to own a radio network. The phase-three radio auction rules dictate that FDI in radio companies
should not be more than 49 per cent. It also mandates a three year lock-in period for the companies that migrated from phase-two to phase-three, which may further hamper the sale of assets for radio RBNL.
Sources reveal that Subhash Chandra is keen on acquiring a radio asset and may use one of the other Essel companies under his media empire to carry out the sale. Apart from ZEEL, Essel also has interests in education company ZEE Learn and news
media network Zee Media Corporation which runs the business news
channels under the Zee brand and the English daily DNA.
While it cannot enter the radio segment in India, ZEEL made its first investment in the sector last week with the acquisition of UAE-based radio network Hum 106.2 FM.