The National Company Law Tribunal (NCLT) has approved the merger of Saavn Holdings into Saavn Media, the company that owns and operates audio streaming platform JioSaavn.
Delaware-based Saavn Holdings, a subsidiary of Saavn Media, will follow the required procedure under Delaware state laws to effectuate the merger. Jio Platforms holds an 87.65% stake in the company, while Saavn Holdings owns an 8.15% stake.
The NCLT’s Mumbai bench, comprising members Prabhat Kumar and VG Bisht, mandated Saavn Media to submit a copy of the sanctioning order and scheme within 30 days to the Registrar of Companies. The scheme was approved by the NCLT on February 27. The company scheme petition was filed in October 2023.
The bench noted that the income tax department can investigate if any tax is owed as a result of the plan and take appropriate action if it results in tax avoidance under the Income Tax Act. The merger scheme aims to optimise group structure by reducing legal entities and achieving a leaner organisational structure that aligns with the parent company’s business.
Saavn Media also aims to consolidate investments, reduce legal and regulatory compliance, administrative and record-keeping, and ultimately reduce expenditure through this scheme.
JioSaavn is a leading audio streaming platform with a music library of over 45 million songs. The platform has a hybrid revenue model of subscription and advertising. It competes with other platforms like Spotify, Wynk Music, YouTube Music and Prime Music.
For the fiscal year ended March 2023, the company had impaired its investment in Saavn Inc by Rs 1,068 crore. The company had tested for impairment of the investment in its subsidiary Saavn Inc and arrived at a net recoverable value of Rs 698 crore.