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| UTV hunts for strategic partner for UTVi |
| Arun Kumar & Ashish Sinha / New Delhi Mar 19, 2009, 00:13 IST |
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 Within a year of the launch of its English business news channel UTVi, the UTV group has decided to rope in a strategic partner with a "significant stake". According to investment banking sources, the company is looking at raising between Rs 100 crore and Rs 125 crore from the strategic partner on a valuation of about Rs 200 crore.
The funds are needed to meet losses for the next two years, sources said. The channel, which was launched in April 2008, earns around Rs 2 crore a month and incurs an operating monthly cost of Rs 7.25 crore.
As a result, its monthly loss is around Rs 5 crore, translating into an annual loss of around Rs 60 crore, sources said. The losses are mainly on account of a fall in advertising revenues, a problem afflicting the media industry as a whole.
UTVi is one of the three leading English business news channel with a market share of 5 to 6 per cent in the business news genre. CNBC TV18 and NDTV Profit are the other two competitors, and the market is expected to grow crowded with the impending launch of ET NOW from Bennett, Coleman & Co.
The promoters have already invested around Rs 170 crore through equity and debt. Rohinton (Ronnie) Screwvala and his family invested Rs 20 crore as equity and own 80 per cent of the company. The remaining 20 per cent is owned by UTV Software Communications, which invested Rs 40 crore as equity and gave a loan of Rs 50 crore, sources said. The company has also raised additional debt of Rs 60 crore.
When contacted, Screwvala declined to comment, saying that it was “too premature” to do so.
Under current broadcasting norms, a single Indian promoter group needs to own a minimum of 51 per cent in a news broadcasting channel.
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