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DTH News: RCom inks new deal to sell DTH biz to Pantel, Veecon - Printable Version

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RCom inks new deal to sell DTH biz to Pantel, Veecon - nairrk - 11-28-2017

[Image: Reliance-Digital-TV.jpg]MUMBAI: After entering into a memorandum of understanding (MoU) with Veecon Media & Television, Anil Ambani-led Reliance Communications (RCom) has announced a new deal which will see IT and communications service provider Pantel Technologies acquiring the company’s direct to home (DTH) business under Reliance Big TV along with Veecon.

RCom has entered into a binding Share Purchase Agreement (SPA) with Pantel Technologies and Veecon Media & Television for sale of its subsidiary Reliance BIG TV (RBTV), engaged in the business of DTH services across India. The DTH business is operated under the Reliance Digital TV brand.

Pursuant to this transaction, the buyers will acquire the entire shareholding of RBTV with business on an “as-is, where-is” basis, along with existing trade and contingent liabilities.

The existing DTH licence of RBTV is being renewed, and the required Bank Guarantees have already been submitted to the ministry of information and broadcasting (MIB).

The transaction ensures that the 1.2 million customers of Reliance Digital TV will continue to enjoy uninterrupted services. It also ensures continuity of employment for approximately 500 employees of RBTV.

The transaction will help to reduce the liability of unsecured creditors, benefitting all stakeholders, including lenders and shareholders of RCom. RCom is reeling under a debt of Rs 45,000 crore.

The company has mounted a plan to sell assets to cut down debt failing which the lenders will convert debt into equity. DTH being a non-core business of the company has been sold off.

The successful culmination of the transaction is subject to requisite approvals from licensors, regulatory authorities (Ministry of Information & Broadcasting) and lenders of RCOM.

The new deal comes close on the heels of the pressure being mounted by Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on the company to clear the dues it owes to the broadcasters.

Sun TV Network, Discovery Communications India and Sony Pictures Networks India (SPNI) have moved TDSAT to recover dues from the DTH operator. The DTH operator had also defaulted on a payment to satellite operator Measat following which it was asked by TDSAT to pay the dues or face transponder suspension by Antrix Corporation, the nodal agency for procuring satellite transponders.

Without stating anything about the deal with RCom, Pantel Technologies CMD Vijender Singh said, “Pantel Technologies is a young Information Technology and Communication devices company, selling innovative Tablet PC(s) under the brand name of Penta T-Pad(s) in the Indian, South-East Asian, GCC and African markets. Pantel Technologies has collaborated with Mauritius Telecom—the telecom service provider of Mauritius—bringing digital computing solutions to the Mauritian and African markets at affordable prices.”

Earlier, RCom had entered into a MoU with Veecon to sell its DTH business. The deal involved renewing the DTH licence and retaining the 500 employees of the group.

Prior to the MoU with Veecon, RCom had issued a notice stating that the DTH business is being shut down from 18 November due to the expiry of licence.

The company had also partnered with Tata Sky to ensure a smooth migration of its customers. Other DTH operators also came up with offers for Reliance Digital TV customers.

Reliance Digital TV is the smallest among the six pay DTH platforms in the country with a measly 2% of 65.31 million active pay DTH subscribers, as on 30 June. Dish TV is the biggest DTH operator with 24% share followed by Tata Sky (23%), Airtel Digital TV (21%), Videocon d2h (20%).

Launched in August 2008, Reliance Digital TV is a profitable DTH company as per the last available information for the fiscal year 2016.

During FY16, Reliance Big TV had reported a net profit of Rs 232 crore on a total income of Rs 638 crore. In the FY15, the net profit was Rs 12 crore while the total income stood at Rs 994 crore