TV18 founder Raghav Bahl has announced that he, along with his wife and director Ritu Kapur has "effectively ended" his "entrepreneurial leadership of N18 by agreeing to exit" their shareholding in the company.
He added that he would be around to ensure a smooth transition from the Network18 group.
In the biggest ever deal in the Indian media sector announced yesterday, Reliance Industries Ltd (RIL) has acquired control in Network18 Media & Investments Ltd, including its subsidiary TV18 Broadcast Ltd, for Rs 4,000 crore.
The Board of RIL had yesterday approved funding of up to Rs 4,000 crore to Independent Media Trust (IMT), of which RIL is the sole beneficiary, for acquisition of control in Network18 Media & Investments Ltd (NW18), including its subsidiary TV18 Broadcast Ltd (TV18).
The funding includes open offers to be made consequent to the acquisition.
The deal goes back to 2011 when Network18 had a consolidated debt of almost Rs.1,400 crore on its books and had turned to Reliance for help.
In a very opaque deal, RIL had invested in the form of zero coupon optionally convertible debentures in Network18’s promoter group companies.
Competition Commission of India ordered that these debentures could be converted into shares at any time within a 10-year period, which would result in ownership of over 99.9% by RIL in these entities.
The move had then resulted in the then group CEO Haresh Chawla quitting as he had instead suggested divesting of stake in the entertainment business to Viacom.
In January 2012, Network18 Group and Reliance Industries joined hands for a multi-layered deal, under which the Mukesh Ambani-led corporate giant would sell part of its interest in ETV channels and would get access to content and distribution assets of the electronic media group.
"IMT would use the funds to acquire control over NW18 and TV18 resulting in ownership of about 78 per cent in NW18 and 9 per cent in TV18 and to acquire shares tendered in the open offers," yesterday's RIL statement added.
NW18 is the owner of a suite of premier digital internet properties, e-commerce businesses and differentiated broadcast content including In.Com, IBNLive.Com, Moneycontrol.Com, Firstpost.Com, Cricketnext.In, Homeshop18.Com, Bookmyshow.Com; the broadcast channels include Colors, CNNIBN, CNBC TV18, IBN7, CNBC Awaaz.
Network18 Group CEO B Sai Kumar, COO Ajay Chacko and R.D.S Bawa, the CFO have moved on from the company in quick succession in the last few days preceding the announcement.
There have been persistent rumours that the top editors of CNN-IBN, Rajdeep Sardesai and Sagarika Ghose, who hold minority shares in the company, are likely to resign by the end of next month.
Following is the full text of Mr Bahl's letter formally announcing the decision to his colleagues:
Dear Team Network18,
Yesterday, Ritu [his wife and director Ritu Kapur] and I effectively ended our entrepreneurial leadership of N18 by agreeing to exit our shareholding (although I would be around to ensure a smooth transition).
We are also delighted to welcome Mr Mukesh Ambani and RIL as the potential owners of Network18. Believe us, the Group is in terrific hands. Mr Ambani is a visionary and truly good human being. And we have no doubt that Network18 would soar into the "cloud" under this dispensation. All of you have very good cause to be excited and optimistic about the future.
There are thousands of team-mates, both past and present, whose collective tejasvi karma has buoyed N18 to where it is today. Our heartfelt gratitude towards all of them! (We would like to make a special mention of our very own Vandana, who was the first manager-cum-driver-cum-lights"man" of TV18 in the early 90s).
Wish us well as we embark on our next quest - we are, as usual, utterly positive about the future. God bless you, and God bless Network18.
Ritu & Raghav