MUMBAI: Sahara Group is acquiring a majority stake in Digicable Network (India) that will mark the Lucknow-based financial services-to-real estate-to-media conglomerate‘s entry into the cable TV business ahead of the government‘s digitisation mandate.
Ashmore will exit from Digicable after investing in the company in 2007. The UK-based global private equity fund held equal stake of 49 per cent in Digicable and Broadband Pacenet, both promoted by Jagjit Kohli and Yogesh Shah.
Digicable was 51 per cent owned by Broadband Pacenet, the Mumbai-based broadband services provider, and 49 per cent by Ashmore. This in effect gave Ashmore around 74 per cent stake in Digicable, the multi-system operator (MSO) with a pan India footprint.
Highly placed sources have confirmed the deal to Indiantelevision.com.
The transaction will be a two-way process. Steller Interactive Media Pvt Ltd, the parent company through which Kohli and Shah hold their stakes in Digicable and Broadband Pacenet, will first buyout Ashmore with the support of Sahara. Steller Interactive Media, after taking full ownership of Digicable and Ashmore, will then sell majority stake to Sahara.
Post transaction, Sahara is likely to hold 74 per cent stake in both the companies while the remaining will be with Kohli and Shah, sources said.
Sources could not confirm the exact amount Ashmore took home to exit from its cable and broadband investments in India. The private equity firm had poured in around $240 million into the company and was looking to exit from its sour investments.
Sahara had shown nascent interest in cable and IPTV business years back but did not venture into it due to the revenue leakages from the last mile that was owned by the local cable operators. The analogue cable market was also highly fragmented. Sahara’s interest now stems from the mandate to the cable TV industry to switch over nationally from analogue to digital by December 2014, beginning with the four metros over the next three months.
Sahara Group also owns a broadcasting business. Sahara One Media and Entertainment Ltd operates in the motion pictures and Television arena. The company runs three channels – Sahara One, Filmy and Firangi.
Digicable was started in 2007 by Kohli, along with his business partner Yogesh Shah, soon after he quit Zee Group‘s Wire & Wireless India Ltd (WWIL). He had then roped in Ashmore to invest in the business.
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