Government approves Disney's Rs 10 bn FDI proposal

MUMBAI: The Indian government has approved The Walt Disney Company South East Asia?s foreign direct investment (FDI) proposal to induct Rs 10 billion in The Walt Disney Company India.

The company wanted to induct foreign equity for business expansion and making downstream investment in other companies and subsidiaries of the company, including broadcasting companies.

Besides Disney?s proposal, the government also approved nine other FDI proposals amounting to Rs 2.59 billion approximately.

UK-based Packt Publishing has also received government approval to induct foreign equity amounting Rs 700,000 to carry out the business of publication books.

In February, The Walt Disney Company had increased its ownership stake in UTV Software Communications to 93 per cent from 50 per cent by buying out promoters stake for $377 million in line with the company?s strategic priority of increasing its brand presence and reach in key international markets.

The company had also assumed approximately $300 million of UTV?s borrowings.

Additionally, the company has paid $63 million to acquire an incremental six per cent stake for Rs 1,100 per share bringing its ownership percentage to 99 per cent.

Upon consolidation, the company recognised a non-cash gain of $184 million ($116 million after tax) as a result of adjusting the carrying value of the company?s 50 per cent equity investment to its estimated fair value of $405 million.

Subsequently, UTV was delisted from the Bombay Stock Exchange and its promoter Ronnie Screwvala was appointed as the managing director of The Walt Disney Company India.

Meanwhile, the FDI proposal of leading television network Multi Screen Media (MSM) was among the 16 proposals that were deferred.

MSM wanted to induct foreign equity to carry out the business of production of television programmes in India languages primarily for export, sale and distribution of Indian language audio visual production besides downlinking certain TV channels.

Hyderabad-based Scribble Media & Entertainment?s proposal to induct foreign equity for carrying out the business of its evening news publication Post Noon was also deferred.