Dish TV raises $100 million in GDRs
24 November 2009
DishTV, the country's leading Direct-to-Home (DTH) operator, has raised $100 million through the issue of Global Depository Receipts (GDRs) to New York based-Apollo Management, a leading alternative asset manager.
Apollo has recently made investments in the media and satellite space, in Huges Network Systems, Intelsat, Sirius Satellite Radio and CableCom, and several other companies.
Under the terms of the deal, Apollo will be issued 117,035,000 new equity shares of Re1 each in the form of 117,035 GDRs at a price of $854.5 per GDR (with each GDR representing 1,000 equity shares of a rupee each) aggregating $100 million.
According to a company statement, the deal has been priced in line with the norms prescribed in respect of GDRs, at Rs39.80 per equity share of Rs1 each.
Dish TV, is the largest player in the DTH business with 6 million subscribers. The company had earlier received approval from the Foreign Investment Promotion Board (FIPB), to raise $200 million through overseas issue.
According to Jawahar Goyal, managing director, Dish TV, with the deal, the company would be well capitalised to build on its market leadership and acquire new customers. He added there were no immediate plans to raise the balance $100 million.
DTH companies partially bear the cost of equipment sold to new consumers, to attract them and on expectations that the consumer would pay back and generate more money overtime through monthly subscription fees.
Over the past two years, half a dozen new DTH players have arrived on the scene to tap into the growing potential of the industry, thereby increasing competition and forcing companies to come out with lucrative offers for consumers.