Zee merges with ETC Networks in consolidation drive
24 December 2009
Zee Entertainment Enterprises Ltd on Wednesday approved merging its unit ETC Networks with itself in order to consolidate its entertainment business. Following the merger, the company will spin off its education division into a separate entity and list it on the bourses.
"We wanted to consolidate all the entertainment businesses," Atul Das, executive vice president, corporate strategy and business development, told newspersons in Mumbai. "Now, education being a different nature of business, we felt we need to have a different entity, which can then capture the entire growth potential really well."
In October, Zee Entertainment's board approved merging six general entertainment channels of Zee News in a share-swap deal.
Zee holds 50.2 percent in ETC Networks, which has two arms, entertainment and education. Das said existing stakeholders of Zee Entertainment will get new shares of the education division once it gets listed. "This way their interest in the new company will continue to remain," Das said, adding the board has appointed independent valuers to decide the share-swap ratio.
In fiscal 2009, ETC Networks posted a net profit of Rs8.61 crore on net sales of Rs66.66 crore, of which its education business contributed a little over 250 million rupees.