TV18 Broadcast Limited has informed the Exchange regarding Investor Presentation
TV
February 19, 2020
National Stock Exchange of India Limited, Listing Department, Exchange Plaza, Plot No. C/1, G-Block, Bandra-Kurla Complex, Bandra (E), Mumbai-400051
BSE Limited, Department of Corporate Services Listing, P J Towers, Dalal Street, Mumbai - 400 001
Trading Symbol: TV18BRDCST
SCRIP CODE: 532800
Sub:
Investor Presentation Amalgamation and Arrangement
by Network18
on Composite
Scheme
of
Dear Sirs,
We enclose herewith Investor Presentation being released by Network18 Media & Investments Limited on the captioned Scheme.
You are requested to take the same on record.
Thanking You,
For TV18 Broadcast Limited
Encl.: As above
TVl8 Broadcast Limited (CIN - L74300MH2005PLC281753) Regd. office: First Floor, Empire Complex. 414- Senapati Bapat Marg. Lower Pare!, Mumbai-4000 13 T +91 2240019000,66667777 W www.nw18.~omE:investors.tv18@nw18.com
Investor Presentation Creating a Diversified Media and Distribution Powerhouse
TV Synopsis of transaction
Merging of RIL’s media & distribution businesses into Network18 Listed entities TV18, Den and Hathway to be merged into Network18 Network18 shares to be issued to shareholders of all of the above in swap-ratio
as determined by valuers
Ring-fencing of businesses by placing in wholly owned subsidiaries (WOS) Cable Distribution, Internet Service Provider (ISP) and Digital businesses and
investments to be placed under separate WOS’s of Network18 – Cable Co, ISP Co & Digital Co
Resultant: Diversified business, with better visibility and control Network18 standalone = News Broadcasting business of TV18 Cable Co = Combined Cable business of Den and Hathway + stake in GTPL ISP Co = Combined ISP business of Den and Hathway Digital Co = Digital News business (New18.com, FirstPost, MoneyControl)
Unique combination of content & distribution across linear and digital Net debt free company. Mid-cap stock with ~2000 Cr market-cap
Flagship Media & Distribution entity of Reliance group
2
Simplification of the listed media & distribution businesses of the group
Current Structure
Sole Beneficiary
Independent Media Trust
RIL Companies
75.0%
NW18 (Listed)
51.2%
IMT + RIL Cos: 9.2%
Public
25.0%
39.6%
TV18 (Listed)
Structure Post Merger
Reliance Industries Ltd (“RIL”)
RIL Companies
Public
Sole Beneficiary
Digital Media Distribution Trust
Erstwhile Den Promoters
RIL Companies
Public
Erstwhile Hathway Promoters
78.7%
13.4%
7.9%
72.0%
5.9%
22.1%
DEN (Listed)
Hathway (Listed)
Entities to be merged
Swap ratio for merger
‒ 191 shares of NW18 for every 100
shares of DEN
‒ 78 shares of NW18 for every 100
shares of Hathway
‒ 92 shares of NW18 for every 100
shares of TV18
Public
35.7%
100%
WOS2 (Cable Co)
Sole Beneficiary
100%
64.3%
100%
WOS3 (ISP Co)
RIL
Trusts
RIL Companies1
Merged NW18 (Listed)
100%
WOS1 (Digital Co)
3
Strategic Rationale
Creates one of India’s Largest Listed Media & Distribution Companies
~ Rs 8,000 Cr annual revenue ~ Rs 12,000 Cr market-cap (current price x no. of shares post merger)
Combined group will be a major player across TV and Digital value chain ~13% of TV market, both by viewership and pay-TV subscribers India’s largest News network and #3 Entertainment broadcaster #1 cable distributor with 27 mn connected homes across the country 6.7% share of wireline subscribers in India Enhanced scale to benefit all businesses
Retain a higher share of the consumer spend on TV content within group
Simplifies structure of Network18, and reduces number of listed entities
Unique combination of content & distribution across linear and digital
4
Financial Rationale
Balanced mix of annuity (~53% subscription) and seasonal (advertising
and others) revenue
Reduced volatility of profitability and future levers of growth
Capital structure to improve - Combined company to be Net Debt free
Cost synergies from removal of overheads
Net debt free company with strong financials
5
Proforma Financial Summary - Profitable and Net-Debt free
) 0 2 Y F M 9 ( x i M s s e n i s u B
s c i r t e M
l a i c n a n F y e K
i
) d e i f i c e p s s s e n u
l
s e r o r c R N
I (
(1)
Advertisement and program syndication 100%
Subscription 36%
Advertisement & Others, 64%
Broadb and 10%
Cable 90%
Cable 69%
Merged NW18
NW18 2%
Hathway 22%
Broadband 31%
DEN 16%
TV18 62%
Parameter
9MFY20(1)
Parameter
9MFY20
Parameter
9MFY20
Parameter`
9MFY20
Parameter
9MFY20
Revenue
% growth
EBITDA
% margin
PAT
143
Revenue
3,750
Revenue
15.3%
% growth
(0.3%)
% growth
(73)
n.m.
EBITDA
% margin
464
EBITDA
964
3.4%
148
Revenue
% growth
EBITDA
1,343
10.6%
Revenue
% growth
315
EBITDA
(279)
PAT
275
PAT
36
PAT
56
PAT
12.4%
% margin
15.3%
% margin
23.5%
% margin
Gross Debt
1,460(2)
Gross Debt
Cash
93
Cash
Net Debt
1,367
Net Debt
2,103
210
1,891
Gross Debt
Cash
208
2,237
Gross Debt
Cash
2,048
3,309
Gross Debt
Cash
Net Debt
(2,029)
Net Debt
(1,261)
Net Debt
6,014
(0.3%)
855
14.2%
88
5,817
5,756
60
Note: Cash includes Investments and Bank balances along with cash & cash equivalents (1) NW18 calculated as NW18 consolidated excluding TV18 consolidated (2) Excludes Interco debt from TV18
6
Reorganization to Benefit Shareholders of All Merging Entities
CONTENT ENTITIES Much-improved profitability for Network18 and TV18 shareholders Access to steady cash generation businesses; likely to re-rate multiple Streamlining of two layer ListCo structure, thereby eliminating HoldCo discount Net-debt free profile on a consolidated basis to boost ROE and allow for future growth
DISTRIBUTION ENTITIES Integration with media, and growth from channel pricing by broadcaster Scale benefits and cost synergies to aid growth Exposure to digital content consumption growth
COMMON BENEFITS Leading market positions across multiple industry segments Enhanced liquidity of merged Network18 (~64.3% promoter holding) Increase in equity market following due to ~Rs 12,000 Cr market cap
7
Current shareholding pattern
Particulars
Network18
TV18
DEN
Hathway
Nos in Cr
%
Nos in Cr
%
Nos in Cr
%
Nos in cr
%
RIL shareholding
78.52
75.0%
15.83
9.2%
37.45
78.5%
127.37
72.0%
Network18 shareholding
Den erstwhile promoters
Hathway erstwhile promoters
-
-
-
-
-
-
87.72
51.2%
-
-
-
-
0.07
3.78
-
0.1%
7.9%
-
-
-
-
-
39.19
22.1%
Total Promoter & Promoter Group
78.52
75.0%
103.55
60.4%
41.29
86.5%
166.56
94.1%
Public shareholders
26.17
25.0%
67.88
39.6%
6.43
13.5%
10.45
5.9%
Total
104.69
100.0%
171.44
100.0%
47.72
100.0%
177.01
100.0%
8
8
Post scheme shareholding pattern of Network18 (1)
Particulars
RIL shareholding
Promoter & promoter group
DEN erstwhile promoters
Hathway erstwhile promoters
Other public shareholders
Public shareholders
TOTAL
Network18
Nos in cr
263.96
263.96
7.22
30.57
108.96
146.75
410.71
%
64.3%
64.3%
1.8%
7.4%
26.5%
35.7%
100.0%
Note 1: Based on the share swap ratio
Note 2: The erstwhile promoters of DEN and Hathway would be categorized as public shareholders with no special rights.
9
9
Approvals required; Advisors to the transaction, and Timelines
Approvals Required
SEBI and Stock Exchanges
Shareholders and Creditors' of all merging entities
Company law regulatory authorities and Income Tax Dept
NCLT Mumbai Approval of the DoT(1)
Lawyer: Trilegal
Transaction Partners
Valuer: BDO Valuation advisory LLP (Registered Valuer) and MSKA & Associates (Chartered
Accountants)
Fairness Opinion: Citigroup Global Markets India Pvt Ltd (for Network18) and ICICI Securities
(for TV18, Den and Hathway)
Appointed Date
Appointed date for Merger: February 1st, 2020
Scheme, subject to receipt of all approvals, is expected to be consummated by Q2FY21
Note: (1) Required for transfer of ISP license (DEN) and Unified License – ISP (Hathway).
10
Disclaimer
This presentation is issued by Network18 Media & Investments Limited (the “Company”) for general information purposes only and does not constitute a solicitation or offer or invitation to sell or issue any securities of the Company, nor shall it be relied on in connection with any contract. This presentation may include statements which may constitute forward-looking statements such as statements about the strategy for growth, business development, market position, expenditures, and financial results. However, it should not be relied upon as a recommendation or forecast by the Company. Please note that the past performance of the Company should not be considered as indicative of future results. The actual results or performance of the Company could differ materially from those projected in any such forward- looking statements. The Company does not undertake to revise any forward-looking statement made by or on behalf of the Company. None of the Company, its Directors, Promoter or affiliates or any of their respective employees, advisers or representatives accepts any responsibility or liability whatsoever, arising in tort, contract or otherwise, for any errors, omissions or inaccuracies in such information or for any loss or damage suffered, directly or indirectly, from use of this document or its contents and makes no representation or warranty, express or implied, for the contents hereof including its accuracy, fairness or completeness . Any opinions or information expressed in this presentation are subject to change without notice.
Thank You
For further information - Website: www.nw18.com Email: investors.n18@nw18.com
Investor Relations: Abhishek Agarwal Network18 Media & Investments Ltd. abhishek.agarwal@nw18.com