The National Company Law Tribunal (NCLT) has given Network18 and its subsidiaries TV18 and E18 the go-ahead to proceed with their composite scheme of arrangement.
In its order dated June 5, the Mumbai bench of the NCLT directed the three applicant companies to seek approval from their equity shareholders and unsecured creditors.
Network18 owns 51.17% of TV18 and 91.89% of E18. TV18 also owns a 13.54% stake in Viacom18, which is in the process of merging with Walt Disney’s Star India.
Once the scheme gets all the key approvals, TV18, which is currently a listed entity on both the BSE and the NSE, will be dissolved without winding up.
The meeting of unsecured creditors and the equity shareholders of the three companies to approve the scheme will be held on July 10. The three companies do not have any secured creditors.
Retired Supreme Court judge V. Ramasubramanian has been appointed as the chairperson for the meetings. L. Viswanathan, Sr. Partner, Cyril Amarchand Mangaldas, will serve as the chairperson in case Subramanian is not able to take up the role.
B. Narsimhan, proprietor of BN Associates, will be the scrutinizer for the meetings. In case Narsimhan doesn’t become the scrutiniser, Venkataraman K., Partner, BN Associates, will be his replacement.
The bench of Technical Member Anu Jagmohan Singh and Judicial Member Kishore Vemulapalli also asked the three companies to serve notices along with a copy of the scheme to the central government, Registrar of Companies, Income Tax, GST authorities, and BSE.
After serving notices to the regulatory authorities, they also have to file an affidavit of service with the NCLT within 10 working days. The applicants will also have to report to the tribunal that its directions have been complied with.
Mallika Noorani, senior partner at law firm Parinam Law Associates, said the merger would result in the consolidation of the broadcasting and digital media businesses into a single entity.
“Besides the obvious synergies across different platforms, the merger would also likely lead to cost efficiency,” said Noorani. “Going forward, the merger could also enhance innovation and create a more robust market presence, ultimately driving greater value for customers and stakeholders,” she further added.
Through the scheme, Network18 will consolidate the broadcasting and digital media businesses of TV18 and the moneycontrol business of E18, leading to operational synergies, cost optimisation, and increased revenue realisation.
In December 2023, the board of directors of all three companies approved the scheme of arrangements. The appointed date of the scheme is April 1, 2023, or any other date as may be approved by the boards of the three companies.
As part of the merger scheme, TV18 shareholders will get 100 equity shares of Rs 5 each of Network18 for every 172 shares of Rs 2 each that they own in the company.
Likewise, E18 shareholders will receive 19 equity shares of Rs. 5 each of Network18 for every 1 equity share of Rs. 10 each of the company.
