Nimbus gets Rs 550 cr foreign investments

By SiliconIndia   |   Monday, 22 January 2007, 06:00 Hrs
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Mumbai: Nimbus Communications has garnered foreign investments worth Rs 552 crore and sealed itself the largest private equity investment in the Indian media and the entertainment sector.Companies investing in Nimbus are 3i, Cisco and Oman International Fund. This is the

This move based against the backdrop of repulsion between Nimbus and Prasar Bharti over the ‘feed’ issue that has resulted in Indian viewers missing the live telecast of the first one-day match between India and West Indies.

The equity investment in Nimbus will be through compulsory convertible debentures, which means -- be converted into equity shares after a specified time at an agreed price; might undergo a conversion before the company gets listed. Confirming the move by Nimbus, Harish Thawani, Chairman, said that this is the final round of private equity investments. The proceeds of the investments would be used for expanding the company later.

Thawani, who owns 54 percent of the company, did not disclose other details of the investments. However, after conversion, Thawani’s stakes in the company would see a downfall and believed to be between 40-44 percent.

Meanwhile, this is the second round of investment for 3i. They had earlier invested $45 million in Nimbus for a stake of 33 percent equity. Earlier this month, 3i also invested in Indian digital cinema UFO Moviez. However, earlier Nimbus was interested in expanding the sports facilities and also the technology platform for future launches.

Cisco and Oman International fund have invested in Nimbus for the first time. Cisco has decided to invest in Nimbus on the confidence of its strength in the IP television, while Oman International Fund will help Nimbus boost its presence in the Middle East.

The industry experts feel that apart from financial strength, Nimbus would be looking at large private equity investors for expanding its network. The Nimbus tie-up with 3i was also aimed at giving the Mumbai-based entertainment company opportunities for potential partnership with the 3i portfolio of over 1,500 companies across Europe, US and Asia. Neo sports channel by Nimbus has been launched in the Middle East and Bangladesh, and could soon be available in Hong Kong and Malaysia.

KPMG report has suggested that the Indian Entertainment Industry is likely to grow by 20 percent year on a year basis and might touch $13.5 billion (Rs 59,500 crore) by 2010. Television will form the largest chunk with about 60 percent of the total revenue. The report projects the film industry revenue at $3.25 billion (or Rs 14,300 crore) in 201.

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