Reliance to buy majority stake in DEN, Hathway Cable
MUMBAI: In one swift move, Mukesh Ambani’s Reliance Industries has acquired majority interest in India’s two largest cable TV and broadband companies — Hathway Cable & Datacom and DEN Networks — for a total sum of Rs 5,230 crore.
Reliance Industries (RIL) on Wednesday said it will invest Rs 2,940 crore in Hathway for 51.3% stake via a preferential issue of shares at a share price of Rs 32.35 apiece. In DEN, RIL will be making a primary investment of Rs 2,045 crore through a preferential issue at Rs 72.66 per share and a secondary purchase of Rs 245 crore from existing promoters Sameer Manchanda and others. The transaction will give RIL 66% stake in the company.
ET had first reported on October 16 that RIL is looking to pick up controlling stake in the two multi-system-operators (MSOs). As per SEBI regulations, the investments will also trigger open offers in DEN, Hathway, and Hathway’s subsidiary companies GTPL Hathway, where it owns 37.3% stake, Hathway Bhawani Cabletel, and Datacomm. A highly placed industry official said RIL will spend over $1billion to buy into cable TV operators.
“This is just the beginning. RIL’s game plan is to pick up controlling stakes in strong regional MSOs as well,” the person told ET. “Ambani is ready to spend over $1 billion on this expansion between the primary and secondary investments as well as open offers.” The fresh fundraising will help Hathway and DEN to infuse funds for capital expenditure and increase competitive activity, industry experts said.
RIL said these investments and partnerships will create a win-win outcome for the LCOs, consumers, content providers and overall ecosystem.
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The move, as ET first reported, will help in giving a boost to Ambani’s ambitious JioGigaFiber that aims to connect 50 million homes across 1,100 cities. Reliance Jio Infotech has been facing some resistance from the LCOs. However, with the acquisition of Hathway and DEN, Jio will get control of almost 27,000 LCOs of the two MSOs.
RIL said it will “work together” with Hathway and DEN and all the LCOs to offer a “quick and affordable upgrade” to a worldclass line-up of JioGigaFiber and Jio Smart-Home Solutions to the 24 million existing cable connected homes of these companies across 750 cities.
RIL also said it will ensure compliance with all the regulatory and statutory requirements at all times and work towards systematic growth of the sector. “We are glad to join hands with Rajan Raheja (Hathway promoter) and Sameer Manchanda (DEN), two of the pioneers in MSO industry,” Ambani said in a statement
