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Disney plans 100% arm to set up pay channel
By siliconindia
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Tuesday, 23 September 2003, 19:30 IST
MUMBAI: Media major Disney Enterprises of US has told the Foreign Investment Promotion Board (FIPB) that it will invest $10m over 5 years in an Indian subsidiary to finance the launching of its TV channel as a pay channel.
The company will also explore other business ventures, including production of movies in India, development of theme parks and resorts, and marketing of consumer products and other branded merchandise, according to Disneys application to the FIPB.
Disney, a $25.4bn entertainment group, intends to invest up to 100% of the share capital in the proposed Walt Disney India through fresh issue of shares and transfer of 10,000 equity shares of Rs 10 each held by two resident Indians to the new subsidiary.
The application for setting up a 100% subsidiary follows the dissolution of Disneys decade-long 51:49 joint venture with the KK Modi-Lalit Modi Group, also called Walt Disney India. Following the dissolution of the JV in mid-August, the Modis have rechristened the venture as Abraxas Media.
The JVs activities were limited to licensing the sale of Disney television and movie programmes in India and marketing of Disney merchandise. However, attempts by Disney to launch its channel through a 100% subsidiary two years ago was stymied by the Modis, who refused to give the required no-objection certificate, claiming such a parallel business venture would harm the interests of the JV. This time round, following the dissolution of the JV, the Modis have written to the FIPB that they have no objection in Disney setting up subsidiaries to launch fresh business ventures, or entering into joint ventures with other partners.
Disneys plan for India include setting up of theme parks and resorts, new media and radio and production and distribution of locally-produced movies for both theatres and home entertainment. Such locally-produced software will be distributed both in India and overseas markets, Disney has said.