MUMBAI: Anil Ambani-led Reliance Broadcast Network Ltd (RBNL) is readying capital to seize growth opportunities across its business verticals, including Phase III of FM radio expansion.
RBNL is raising Rs 4 billion via preferential issue of shares to the promoter group and other investors, a move that will boost the company’s net worth and shore up its borrowing capabilities to fund its expansion plans.
RBNL, formerly known as Reliance Media World, has a presence in various sectors like radio, experiential marketing and out-of-home and digital advertising. It recently made an entry into the television broadcasting business through a 50:50 joint venture with US-based CBS Studios International in a separate entity titled Big CBS.
The promoter group will subscribe to approximately 29 million shares, aggregating to approximately Rs 2.50 billion, and investors approximately 19 million shares, aggregating to over Rs 1.50 billion.
The preferential offer, which is subject to necessary approvals, will be made at a price of Rs 85 per share, reflecting a premium of over 25 per cent to the last 26 weeks average market price.
“Post the preferential issue, the promoter holding will not change. We should come cout with the issue in September,” says RBNL chief financial officer Ismail Dabhoya.
The infusion of fresh capital will allow the company to actively participate in growth opportunities like Phase III of radio bids and acquiring strategic inventory in the OOH space.
Says RBNL chief executive officer Tarun Katial, The media and entertainment sector is back on an exciting double digit growth path. This resurgent market has brought with it changes in expectations from marketers and advertisers, as well as newer opportunities for media companies. The equity capital infusion is a reflection of the strong confidence of our promoter group in the future growth prospects of the Company….
Shares of RBNL breached the upper circuit on the BSE and rose 4.99 per cent to close Wednesday at Rs 110.50.