Aniruddha JainTHE TRANSACTION
Jagran Prakashan Limited has announced amalgamation of Suvi Info-Management (Indore) Private Limited (SUVI), a wholly-owned subsidiary of the Company with itself.
TRANSFREE COMPANY:– JAGRAN PRAKASHAN LIMITED
Established in 1942, Jagran Prakashan Ltd (JPL) is India’s leading media and communications group with its interests spanning across print, digital, out-of-home (OOH), activation and radio. Its key brand includes Dainik Jagaran, Midday, Nai Dunia, Inquilab, Sakhi Magazine and Radio city etc.
With 12 titles across 15 states in 5 different languages and a total readership of 68 mn. Jagran is the largest print media group in the country.
Digital
Leading across diverse genres of Hindi News, Education and Health, Jagran New Media, with over 14 mn. unique visitors, and 200 mn. Page Views, is one of the top digital media platforms in the country.
Activation
Jagran Solutions is the leading creator of consumer-oriented, objective driven, measurable brand activations. With over 500 projects executed and over 100 awards, it is one of India’s youngest, most awarded activation agencies.
Radio
It has 20 stations under the ‘Radio City’ brand and 21 internet radio stations under the brand PlanetRadiocity.com.
In 2006, Jagran group went public with IPO and currently its shares are listed on BSE and NSE.
Previous acquisitions by group
- In 2010, Group acquired Midday, Gujrati Midday, and Inquilab
- In 2015, Group strengthen its radio operations by acquiring Radio City.
TRANSFEROR COMPANY: SUVI INFO-MANAGEMENT (INDORE) PRIVATE LIMITED
Suvi Info-Management (Indore) Private Limited is 100% subsidiary of Jagran Prakashan Limited. The Company did not have any business activity during the year 2014-15.
Naidunia Media Limited (NML) is the WoS of SUVI. In 2012, NML’s print business was demerged into JPL. For which JPL issued 15,643,972 equity shares to SUVI pursuant to the scheme of arrangement u/s 391- 394 of the Companies Act 1956.
Last financial year, 6 million shares (1.83%) of JPL were disposed of by SUVI for approximately INR 81 crore through the stock market sale. In a current financial year, SUVI sold its 2.63% stake in JPL to other promoter entity Jagran Media Network Investment Private Limited (JMNIPL) for approximately INR 102 crore.
Further, JMNIPL will purchase remaining stake in JPL i.e. 0.32% on 24th September 2015. This transaction could fetch approximately INR 13.80 crore to SUVI.
Appointed date of the transaction is decided as 1st January 2016. It seems this lection of the date is considering company law provisions and direct tax provisions so that compliance can be minimised and tax liability is optimised.
CONCLUSION
Firstly, Consolidation of the business and assets of the two companies will help in saving various administrative, managerial and other cost and improving organisational efficiency and secondly Upstreaming of cash: – Cash received by SUVI from the sale of its stake in JPL can be used by JPL for the redemption of its debt. As on 31st March 2015 total consolidated borrowings of JPL was approximately INR 547 crores. It is a dilution of stake by the promoters using assets and valuation of a step down subsidiary.
