STAR affiliate to sell its stake in Balaji Telefilms

Mumbai, Hong Kong, August 19, 2008 – STAR Group (“STAR”), Balaji Telefilms Ltd. (“BTL”) and BTL’s Promoters, have late evening yesterday entered into an agreement (“Agreement”) whereby the parties have agreed to terminate the agreements entered into between them, inter se, dated August 18, 2004, in the manner specified in the Agreement. As part of this disengagement, the agreements entered into between BTL and STAR, in April 2007, relating to the regional languages Joint Venture will also be terminated. Upon such termination, both STAR and BTL will be free from their respective rights and obligations under the said agreements.

 

Pursuant to the Agreement, the promoters of BTL are entitled to purchase, either on their own account and/or through a third party(ies) nominated by them, the shareholding held by STAR (through its group entity, Asian Broadcasting FZ-LLC, “ABF”) in BTL for an aggregate price of Rs. 190/- per share. It maybe recalled that ABF had acquired a 25.99% equity interest in BTL in August 2004.

 

The relationship between STAR and BTL as broadcaster and content provider will not be affected and both parties value and are keen on continuing the same. The content supply agreements between the two for various shows produced by BTL will be modified to remove the restrictions imposed upon BTL relating to exclusivity on certain prime time slots. All the six existing BTL shows, currently on air with ‘STAR PLUS”, will continue on terms mutually agreed upon by the two parties. Both parties have also agreed to commence work on a new show to replace an existing show which will be launched before November 30, 2008.

 

Commenting on the Agreement, Mr. Uday Shankar, CEO, STAR India said, “STAR and BTL have agreed to determine all prior agreements such that each side is freed from all respective rights and obligations arising from such agreements. The relationship between STAR and BTL as broadcaster and content provider will not be affected. The new arrangement allows both parties to take the best advantage of emerging opportunities in broadcasting and content creation.”

 

BMR Advisors acted as the exclusive transaction advisor to STAR.
Mrs. Shobha Kapoor, Managing Director, BTL said, “STAR and BTL have enjoyed a successful relationship over the past few years, one that has been to the mutual benefit of both. We are keen to continue this relationship in the best spirit going forward. This agreement with STAR releases BTL from its various obligations and opens up very exciting opportunities for it. BTL, as the leader in the Indian television content business, will be able to cater to the wider needs of the high-growth Indian broadcasting industry. Further, BTL is also exploring strategic initiatives in various other segments of the Indian media and entertainment industry.”

 

Ambit Corporate Finance acted as the exclusive financial advisor to BTL for this transaction.

 

About STAR
STAR is a leading media and entertainment company in Asia. STAR broadcasts over 60 television services in ten languages to more than 300 million viewers across 53 Asian countries. STAR channels cover all genres including general entertainment (Star Plus, Xing Kong, Star Chinese Channel, Star One, Star Utsav, Star World, Vijay, antv, Phoenix Chinese), sports (ESPN, Star Sports), movies (Star Chinese Movies, Star Gold, Star Movies), music (Channel [V]), and news and current affairs (Star News, Star Ananda, Star Majha, Phoenix InfoNews Channel). STAR controls over 20,000 hours of Indian and Chinese programming and also owns the world's largest contemporary Chinese film library, with more than 600 titles, featuring superstars including Jackie Chan, Chow Yun Fat and Bruce Lee. In partnership with leading companies in Asia, STAR businesses extend to filmed entertainment, television production, cable systems, direct-to-home services, terrestrial TV broadcasting, wireless and digital services. STAR is a wholly owned subsidiary of News Corporation. www.startv.com

 

About BTL
BTL is one of the most successful media companies and the largest television content provider in India, producing close to 1,600 hours of television software in a year. The Company is primarily engaged in the production of television software in Hindi, Telegu, Tamil, Malayalam and Kannada. BTL has been promoted by actor Jeetendra, Shobha Kapoor and Ekta Kapoor and has to its credit many successful fiction-based serials, including Kynki Saas Bhi Kabhi Bahu Thi, Kahaani Ghar Ghar Kii, Kkusum, Kasauti Zindagi Kay, Hum Paanch, Kasamh Se (all in Hindi), Pavitrabandham, Kalisundaram Raa (Telugu), Kulaa Villaakku (Tamil), Kavyanjali (Malayalam). BTLhas also successfully developed other genres of content, including reality-based shows (Kaun Jeetega Bollywood Ka Ticket, Kabhi Kabhi Yaar, Kabhi Kabhi Pyaar), mythological show (Kahaani Hamaarey Mahabharata Ki), and event-based programming (STAR Parivaar Awards 2007 and Global Indian TV Honours). BTL has a large content library of over 6,000 hours, and its programmes have consistently appeared in the top 50 programmes on all major television channels.

 

BTL has also diversified into feature film production and distribution, through its 100% subsidiary, Balaji Motion Pictures Ltd., and has successfully produced and distributed Hindi-language films, including Shootout at Lokhandwala, Sarkar Raj, Bhool Bhullaiya, Mission Istanbul etc. For more information about BTL, please visit www.balajitelefilms.com

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