MUMBAI: The restructuring of the Zee Network continues. At a meeting held this afternoon, the Zee Telefilms Ltd (ZTL) board gave the management the go ahead to merge ETC Networks with Econnect India Ltd (EIL) another ZTL subsidiary.
The merger process is expected to be completed within five-six months. Both ZTL and ETC informed the Bombay Stock Exchange of the developments today. The boards of ETC and EIL have also approved of the proposal.
A press release issued by ZTL pointed out that the merger will be synergistic for the two companies as EIL has full fledged offices in Bangalore and Hyderabad, and a network of associates across south India.
ETC, which has plans to launch a southern language music channel, would get access to ready infrastructure courtesy the merger.
This apart ETC also intends to launch an interactive entertainment portal which it could do so immediately using the technical resources available with EIL. The merger will also help shore up ETC's financials as the combined entity will have a better balance sheet as compared to those of the individual companies, the release states.
Earlier this year, ZTL had got board and shareholder approval to whittle down EIL's equity capital from Rs 210 million to Rs 2.6 million. ZTL had also written off the value of its investment of Rs 614.5 million in EIL and another subsidiary Zee Interactive Learning Systems Ltd (ZILS). Consequent to this, ZTL had effected a corresponding reduction in its reserves and surplus by Rs 612.2 million to Rs 34483.6 million.
The ZTL meeting today also approved the merger of five Mauritius based operating entities viz. Software Suppliers International Ltd (SSIL), Zee Telefilms International Ltd (ZTIL - syndication of ZTL content), Zee MGM (managing movie channel MGM), Expand Fast Holding Ltd, BVI (EFHL - providing satellite services to group broadcasting companies) and Asia TV (Africa) Ltd (marketing and distributing the Zee Network in Africa) with Asia Today Ltd (ATL), Mauritius (broadcasting of Zee TV and Zee Cinema).
Addittionally, the board also put the stamp of approval on the launch of a new television channel Jagaran which would have religious content. This would be Zee's second attempt at launching a channel on alternative lifestyles and religion after its earlier aborted attempt through Chakra in 2001.
