ANTO T JOSEPH & BOBY KURIAN, TIMES NEWS NETWORK FEBRUARY 05, 2007
MUMBAI/BANGALORE: US private equity giant Providence is buying a minority stake in Rajan Raheja’s Asianet Satellite Communications, Kerala’s largest cable operator, as rising growth and expanding reach make cable firms a valuable property.
A source close to the negotiations said Providence is likely to pay Rs 300 crore for the stake. An official at the Thiruvananthapuram-based Asianet said preliminary talks are going on, but declined to give details.
Rhode Island-based Providence invests only in media and communication companies. Last year, it bought 16% in AV Birla-controlled Idea Cellular, India’s sixth-largest cellular operator for about $400 million. The firm has opened an office in New Delhi and is interested in increasing its investment in one of the hottest markets for private equity in the world.
Asianet reaches about 5 lakh homes directly in Kerala and provides signal to other local cable operators covering an additional 3 lakh homes. Though Asianet has dominance in the Kerala market, the possible entry of Kalanidhi Maran’s Sumangali Cable Vision is likely to increase competition.
The company has been betting big on the integrated services play of late and has forayed into broadband through Asianet Data Line (ADL), which is expected to contribute an additional Rs 25-30 crore to the topline this year. The company also operates a bouquet of channels, such as Jewel Box, Medley and Asianet Cable Vision (ACV).
The Rahejas had initially acquired 50% in the company for Rs 35 crore in the late ‘90s. They took complete control a few years later. Launched in August 1993, Asianet beams its programmes through Intelsat to over 15 countries in West Asia, South and South-East Asia. The Asianet channel is also picked up by other cable operators in the state.
Asianet Communications (ACL), which owns the channels, was recently taken over by Rajeev Chandrasekhar, the former chairman of BPL Telecom. Jupiter Entertainment Venture (JEV), Mr Chandrasekhar’s firm, bought 51% from the original promoter, Raji Menon, for about Rs 100 crore.
The 13-year-old Asianet is the oldest Malayalam channel, and is going for a major expansion in the near future. New Kannada and Tamil channels will be the latest additions to the bouquet of channels bearing the Asianet logo.