Zee Entertainment Enterprises acquires controlling stake in ETC Network
Zee Entertainment Enterprises Ltd., the largest producer and aggregator of Hindi programming in the world has approved the merger with ETC Network's broadcasting business and Cornershop Entertainment Company in order to consolidate its entertainment business.
The executive vice president of corporate strategy and business development of Zee, Mr. Atul Das has informed that the company is planning to separately run its education division and list it on the stock exchanges in the future.
Mr. Das further said, "Now, education being a different nature of business, we felt we need to have a different entity, which can then capture the entire growth potential really well."
Zee owns a stake of 50.2 percent in ETC Networks, which has two arms viz. entertainment and education, while the existing shareholders of Zee Entertainment will get new shares of the education division after it will get listed on the stock markets.
ETC Networks has registered a net profit of Rs. 86.1 million on the net sales of Rs. 666.6 million in the financial year 2009, out of which its education business contributed over Rs. 250 million.
There was a decline of 0.75 percent registered in the share prices of Zee Entertainment, which closed at Rs. 265.05 while same was the case with the share prices of ETC Networks Ltd, which decreased by 4.9 percent to close at Rs. 200.55 at the Bombay Stock Exchange.
Regarding the issue, a sector analyst at Centrum Broking said, "It doesn't have any effect on shareholders. They will get shares of existing company as well as the new company. ETC will form a very small pie of Zee. Their education business is not very big either."
