MUMBAI: Sahara Group will be transferring the broadcast operations of its entertainment channels to the listed company, Sahara One Media & Entertainment.
This is part of the commitment made to C Sivasankaran and BCCL (Times Group holding company Bennet Coleman & Co Ltd) when they acquired stakes in Sahara One Media & Entertainment last year, a source familiar with the deal says. While Sivasankaran's Aircel Televentures (later renamed Siva Ventures) picked up 14.98 per cent for Rs 1.2 billion, BCCL acquired close to 6 per cent stake in the company.
The broadcast operations are currently under Sahara India TV Network, a division of Sahara India Commercial Corporation Ltd. "The plan is for the listed company to also have the broadcast operations under it," says the source.
The transfer will mean that Sahara One Media & Entertainment will be able to capture the advertising revenues from the two existing channels, Sahara One and Filmy. The company currently earns from the programming it licenses to Sahara India TV Network and from its motion pictures business.
"Sahara One will be able to capture the full part of the value chain. The entire infrastructure will be under one company," says the source.
The cost of running the channels including transponders and carriage fee will, thus, come under Sahara One Media & Entertainment. But there would be no transfer of the assets and liabilities of Sahara India TV Network. "The idea is to start with a clean slate and then build the broadcasting value," says the source. "Under the current system, Sahara One does not run any commercial risk in the TV business as it produces content and passes it on to the channel on a cost-plus-commission basis," he adds.
Sahara's news channel business also has a separate broadcasting arm and is under Sahara India TV Network (2). Sahara runs six news channels - in the national, regional and city-centric space.
Meanwhile, the Sahara One Media & Entertainment board has approved raising of resources up to $ 20 million through foreign currency convertible bonds (FCCBs).
"This will be used to meet the company's working capital and content acquisition requirements," says the source. Earlier, Sahara One had planned to come up with a provision to raise up to $50 million as it was at that stage in talks to acquire an equity in Ten Sports. Later Zee Group bought a 50 per cent stake in the sports channel for $57 million.
