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MUMBAI:
Sun TV Ltd. has acquired 48.9 per cent stake in Red FM, a
move that will provide its FM radio business a footprint in
the three metro markets of Mumbai, Delhi and Kolkata.
Malaysia-based
Astro has exited from Red FM. The balance 51.1 per cent will
be held by promoters Usha Reddy and Arjun Rao who own IT company
Value Labs.
Sun
has made the acquisition at par through its subsidiary South
Asia FM Limited (SAFL). "We will continue to hold 51.1
per cent in Red FM while Sun will have the balance. Astro
will no more be a shareholder in Red FM," Rao tells Indiantelevision.com.
Earlier
Rao, NDTV and Astro had bought out Red FM from the Living
Media Group (owners of India Today, TV Today and Radio Today).
NDTV
will now not hold stake directly in Red FM. The promoters
of Red FM - Rao, Reddy and NDTV News - will be given 35 per
cent of the enlarged equity of SAFL. The balance equity of
SAFL will continue to be held by its existing shareholders.
Rao
and Reddy will have equity in SAFL through their investment
company A H Multisoft. When queried on whether this was a
cashless transaction, Rao declined to comment on the commercial
terms.
SAFL
owns 23 FM radio licenses all over India (except the Southern
states of Tamil Nadu, Karnataka, Andhra Pradesh and Kerala).
It currently has two operational radio stations at Jaipur
and Bhubaneshwar.
Red
FM operates three radio stations in Mumbai, Delhi and Kolkata.
"This alliance enables us to boost its presence in the
fast-growing FM radio market in India," Sun said.
Sun
TV's subsidiary Kal Radio operates FM radio stations in the
southern language states. The promoters of Red FM will not
have any stake in this.
Enam
Securities was the advisor to the transaction.
Sun's
shares on Thursday were up 5.87 per cent at Rs 330.25 on BSE.
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