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Reliance divests ETV interest to TV18, strikes 4G content deal

Infotel, a broadband subsidiary of India's Reliance Industries (RIL), has signed a memorandum of understanding with TV18 and Network 18 for preferential access to TV and web content for future 4G distribution in India. In return, some of the interest in ETV owned by RIL is to be divested to TV18 Broadcast.

RIL currently holds a reported INR 2,600 crore investment across the Eenadu Group's ETV channels, according to afaqs! This includes 100% of regional news channels ETV Uttar Pradesh, ETV Madhya Pradesh, ETV Rajasthan, ETV Bihar, and the ETV Urdu channel; and 100% in entertainment channels ETV Marathi, ETV Kannada, ETV Bangla, ETV Gujarati and ETV Oriya. Reliance also has a 49% stake in ETV Telugu and ETV Telugu News.

Reliance will reportedly now transfer 100% interest in news channels, 50% interest in entertainment channels and 24.5% in the Telugu channels to TV18.

Network 18 and TV18 are reportedly raising funds for the acquisition of the ETV channels through a rights issue.

Independent Media Trust, established for the benefit of Reliance Industries, has reportedly agreed to fund the promoters of Network 18 and TV18 to enable them to subscribe to the proposed rights issue.

Meanwhile, Infotel – which is currently building its fourth generation (4G) broadband network across India – will have preferential access to the content of all the media and web properties of Network 18 and its associates, along with broadcast programming and digital content of TV18 and its associates.

"Reliance will leverage its deep understanding of the Indian markets - consumer insights, technological expertise, and the ability to build and manage scale - to make this a 'win-win' partnership. This will create value and be accretive to the shareholders of RIL," the company is quoted as saying by afaqs!

"The combination of India's leading TV content provider, with a bouquet of nearly 25 channels, and Infotel, will be a significant step in bringing a high quality 'live TV' experience to broadband customers across the country. Likewise, Network18's market-leading web portals and e-commerce operations will provide several value added services to Infotel's broadband subscribers. This unique alliance is expected to differentiate Infotel and create value for all stakeholders," said Reliance.

Raghav Bahl, founder, controlling shareholder and managing director of Network 18, will reportedly retain control both Network 18 and TV18.

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