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MSO Den completes preferential share allotment

Funds to enable digital cable roll-out and expansion have now been received by Indian multi-system operator (MSO) Den Networks following a preferential share allotment of INR6.9 billion (US$110.3 million) to affiliates of Goldman Sachs.

The deal, which was approved by the board in early June, has finally concluded with 31.7 million shares being sold at INR217.50 each. Broad Street Investments (Singapore) Pte will hold 16.18% and MBD Bridge Street 2013 Investments (Singapore) will hold a 1.62% stake in the MSO, which boasts an 11 million-strong subscriber base across over 200 cities in India.

The company looks well set to embark on the next stages of India's mandatory digitisation of its vast and fragmented cable television network, according to analysts. Around five million Den subscribers now receive digital TV services after the first two phases of digitisation, with around half of its subscriber base due to be digitised in phases three and four.

"Den Networks is the only net profit positive MSO since 2011, and has registered 16.7% CAGR (FY11-13) in net profit to INR6.23 billion. The company has an edge over its peers, owing to its largest subscriber universe in the next two phases. Complete digitisation of this base is expected to make a significant impact on Den's financials," Karan Mittal, analyst at ICICI Securities, told Business Standard.

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