Zee Television is to pre-pay Star TVís debt of $ 150 m (Rs 6,525 m). The company had taken on this debt when they took charge of the 50:50 broadcasting joint venture Asia Television Ltd.
The Zee group already has a television production facility, a channel (Zee TV), a cable operation (Siticable), music rights of some movies (through Zee Music) and a theme park (Esselworld) in place. It has recently ventured into publishing and film production and has plans for launching a sports channel. It has also started to beam a kids channel Nickelodean, which is a part of its tie-up with Viacom. Zee TV reaches 140 m people in 25 m homes in India and another 70 m homes in 15 m homes overseas.
The repayment of debt would imply a reduction in the interest charges to the tune of almost Rs 450 m for Zee in the next year FY2001. The company is flush with cash having placed 2% of its equity with Goldman Sachs recently at the rate of Rs 1,000 per share. Besides, it also plans a US$ 1.5 bn ADR issue and the repayment of debt would definitely shore up sentiment prior to the issue.
Analysts have rated Zee TV as a buy, primarily because of the jump in revenues post the incorporation of the revenues that formed part of ATL earlier. The companyís plans for a bouquet of channels, which is nearing fructification, would all contribute to the revenue stream in the future.
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