Shares of Network18 Group companies— Network18 Media and Investments (Network18), TV18 Broadcast (TV18)— have rallied 20% each in morning trade, extending their Tuesday’s 20% surge, as the proceeds of the proposed rights issues of both companies would render them debt free.
Both companies, at their respective board meetings on January 3, announced fund raising plans vide rights issues, to repay their existing debts and expansion into regional news and entertainment business. Both the companies will become debt free companies after repaying the debt.
At a board meeting on Tuesday, January 3, Network18 approved a rights issue of equity shares at a price not exceeding Rs 60 per equity share, while TV18 approved a rights issue at a price not exceeding Rs 40 per equity share.
Network18 has rallied up to Rs 55.35 and TV18 at Rs 40.35 on the National Stock Exchange.
TV18 will utilise the rights issue proceeds to repay its existing debt, fund the acquisition of the ETV Channels and fund working capital needs. Network18 will utilise the rights issue proceeds to repay its existing debt and subscribe to the rights issue of TV18, the company said in a filing to the stock exchanges.
Meanwhile, Independent Media Trust, a trust set up for the benefit of Reliance Industries Limited, has agreed to fund the promoters of Network 18 and TV18 to enable them to subscribe to the proposed Rights Issue announced by both the companies.
