Times Global to sell 25% stake, appoints UBS as advisor

Times Global owns news channel Times Now and soon-to-be launched business news channel ET Now.

News broadcaster Times Global Broadcasting Co. Pvt Ltd is looking to raise $48-58 million and has given the mandate to UBS Securities India Pvt Ltd. The firm is looking to sell a 25% stake at an expected valuation of $200 million, Contentsutra has reported, quoting investment documents. VCCircle learns that the company is in talks with private equity funds like Carlyle Group, which has not been verified.

Times Global, which own news channel Times Now and yet to be launched business news channel ET Now, is a subsidiary of Bennett, Coleman & Co. Ltd (BCCL), which also publishes The Times of India and Economic Times.

The funds will be used for expansion of Times Now, repayment of bridge loan to BCCL for rollout and capex of ET Now, and part redemption of preference capital to BCCL. The total investment by BCCL in Times Global is $94.8 million. While $33.3 million of this is in unsecured loans and $27.7 in preference capital, the rest is in equity capital.

The broadcasting group expects to be cash flow positive by FY11. Times Now is expecting ad revenues of $17.9 million this year, which it expects to rise to $40.2 million by FY11 and $71.2 mllion by FY14. Times Global also plans to earn money through events and international distribution. These two streams are expected to contribute more than $10 million by FY14.

ET Now

ET Now has started dry runs at its studios in Mumbai and is expected to be launched soon. Times Global has hired a workforce of 280 employees for ET Now, and expected headcount is 396. ET Now is in process finalising programme schedules, the styling and look of channel and anchors, reporters, etc. It will have two studios in Mumbai and one in Delhi, which is being set up. ET Now has already finalised content alliance deals.

ET Now is expecting revenues of $6.9 million in FY10, which it expects to rise to $19.3 million in the subsequent year and $62.9 million by FY14. The channel plans to earn money through advertiser funded programmes and events, which it expects at $4.8 million in FY11 and to $16.2 million by FY14.

Quite a few news channels have attracted private equity funding in the past even though foreign direct investment is restricted at 26% the news broadcasting sector. TV networks like NDTV, India TV, and INX Media, among others, have raised capital from PE funds. Even regional news channels such as Telugu news channel TV 9 has raised funds from Peepul Capital. In the case of INX, PE investors like Temasek, New Silk Route, Kotak PE and Srei Capital are struggling to keep the ship afloat as the company has been going through a churn weak audience ratings (except in the music channel).

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