HT Media shareholders okay radio business demerger

NEW DELHI: HT Media Ltd (HTML) equity shareholders, secured and unsecured creditors' meeting which took place on 28 January has decided to go ahead with the demerger of the radio business from subsidiary company HT Music and Entertainment (HTME). HTME's FM radio stations operate under the Fever FM brand. According to company sources, “Yes, the meeting of the shareholders did happen today and most of the shareholders have agreed to demerge the radio business. Nevertheless we will publish the final outcome of meeting on Friday, 30 January at 4 pm. After which the chairperson of the company will send a report to the Delhi High Court and then the High Court will a lot a date for hearing the matter, after which the demerger will take place.” The company had earlier said that the proposal was to write-off part of the share capital of the demerged (HTME) company which has been eroded due to accumulate losses and utilisation of securities premium of resulting company (HTML) for the said purpose and also to the demerger of the radio business of HTME and transfer vesting thereof into the resulting company. "Radio business of the demerged company has incurred substantial losses since inception on account of low advertisement revenue, high brand building cost, delay in availability of common infrastructure resulting in substantial investment in transmission facilities for Delhi and Mumbai FM Radio stations... All of which have resulted in erosion of its share capital," HT Media said. Also, the company is expecting that as the radio business is in consolidation and expansion mode, it is likely to continue incurring losses in near term. The source added, “We at HT Media expect the year 2009-10 to earn positive results for the radio business.” Earlier on 28 November HTML board had approved the demerger proposal. The demerger was subject to necessary approvals and sanction of the concerned authorities and Delhi High Court.

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