Television Eighteen India Ltd has announced that TV 18 has finalised the scheme for consolidating its media businesses, the preliminary details of which were approved by the company's board of directors on October 12, 2005. The scheme creates a Group structure that is expected to unlock significant shareholder value. Hitherto, the Hindi consumer channel of the Group, CNBC Awaaz, and the general news English Channel, CNN-IBN, were held in promoter entities and were legally not a part of the listed company, owing to government restrictions.

The new scheme envisages consolidation of the business news operations (including Awaaz and CNBC-TV18) in TV18, whereas Network 18 India Holdings Ltd (the proposed name of the listed holding company) would hold majority stakes in TV18 and in the channel CNN-IBN. TV18 would also hold a portfolio investment stake in CNN-IBN, whose value could be realised at an opportune time. The restructuring would enable the group to comply with the uplinking guidelines of the government.

Post-sanction of the High Court, the revised structure would leave TV-18 with a share capital of 52.41 million shares each of a face value of Rs5, while Network-18 would have a share capital of 50 million shares also of a face value of Rs5 each. Post implementation of the restructuring, Network 18 will approach the markets with a public offering, to raise money for further growth as well as facilitate efficient price discovery.

KPMG India Pvt Ltd provided valuation guidance for the scheme of restructuring, while BMR & Associates acted as transaction and financial advisors.

Based on the share swaps recommended, an existing shareholder of TV-18 holding 10 shares of a face value Rs10 each would end up with 12 shares of face value Rs5 each in Network Ltd and 14 shares of face value Rs5 each in TV18.

The group will now approach stock exchanges for mandatory clearances, and then apply to the Delhi High Court for sanction of the scheme.