Reliance Broadcast to raise Rs 400 cr, in talks with PE firms

NEW DELHI: Reliance Broadcast Network ( RBNL) on Monday said it is in discussion with private equity players to raise up to Rs 400 crore to fund its radio and television network expansion.

"We are looking at raising about Rs 300-400 crore. We are in discussions with private equity players and strategic investors," RBNL Chief Financial Officer Asheesh Chatterjee told PTI.

He added that the company expects to finalise the deal before the end of the ongoing fiscal.

The company has appointed Yes Bank as one its advisers for the transaction, he said, adding the transaction would not lead to dilution of promoter stake.

As on quarter ended June 30, 2011, the promoters have 63.87 per cent equity in the company.

He said the fund would be used for financing expansion of its business, mainly the radio business and also to partly repay debt which is at Rs 120 crore.

RBNL runs its radio business under BIG FM and operates three English entertainment channels under its joint venture with US-based CBS. It also runs a regional channel -- BIG Magic.

RBNL's scrips closed at Rs 78.15, up 3.3 per cent from previous close on the BSE.

Commenting on the expansion plans, Chatterjee said: "The government has recently announced the Radio FM Phase III and that is one area where most of the fund infusion will be."

Earlier this year, the government had raised foreign direct investment limit in the radio sector to 26 per cent from 20 per cent.

The radio business contributes about 60 per cent to the overall revenues. For the quarter ended June 30, 2011, RBNL's consolidated net loss was Rs 29.1 crore and revenues stood at Rs 75.2 crore.

Chatterjee said the company would also use part of the fund in expanding its television business.

"BIG CBS channels as well as BIG Magic have received tremendous response and are leaders in their category. We are expecting the business to grow substantially and contribute about 30-35 per cent to the revenues in the next 2-3 years," Chatterjee said.