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MUMBAI: In the single-largest investment in Indian media,
global private investment firm Blackstone Group has announced
it will be pumping in $ 275 million (approximately Rs 12.38
billion) to acquire a stake in Ushodaya Enterprises Limited
(UEL), the holding company that manages Ramoji Rao's media
assets.
While yesterday's announcement gave no details on the quantum
of the stake that Blackstone would be taking in the south
Indian media baron's closely held company, media reports have
put it at 26 per cent. This would put UEL's enterprise valuation
at $1.06 billion.
In addition to the $ 275 million that UEL is raising from
Blackstone, it is also taking $190 million of bank financing,
bringing the total financing it expects to raise to $465 million.
As part of the agreement, Blackstone will have representation
on the Board of UEL.
The transaction is subject to regulatory approval by Foreign
Investment Promotion Board (FIPB) and the information and
broadcasting ministry.
UEL chairman Ramoji Rao stated, "We were impressed with
Blackstone's disciplined and highly rigorous investment process
and the ability to combine this emphasis with a deep and genuine
respect for the promoter's interests and desire to add value.
The company had access to several financing options, including
an IPO; but we decided to go with Blackstone because we believe
that at this stage of our growth we have an opportunity to
create significant value by leveraging Blackstone's outstanding
experience and track record in the global media sector."
Akhil Gupta, chairman and managing director of Blackstone
Advisors India Private Limited, stated, "We believe that
the Indian media sector will be a key beneficiary of a secular
trend in growth in personal consumption that is driving India's
economic expansion which in turn will spur advertising growth.
Importantly, we believe that UEL is an ideal platform for
Blackstone to play this highly attractive sector in India.."
Kotak Investment Banking acted as the sole investment banking
advisor to the transaction.
UEL owns Eenadu, the third largest newspaper, and ETV, the
fourth largest private television broadcasting network in
the country. The parent company of UEL, Ramoji Group, owns
the 1,600-acre Ramoji Film City, which is Asia's largest studio,
apart from diversified interests in hotels, foods and financial
services.
The Blackstone Group is a global private investment and advisory
firm that has has raised a total of more than $75 billion
for alternative asset investing since its formation of which
over $30 billion has been for private equity investing
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