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Zee net vaults 160 per cent to Rs 333 crore

Zee Telefilms (ZTL) has decided to drastically cut down the size of its proposed American depository receipts issue from $1.5 billion to $200 million.

Zee Telefilms vice-chairman and MD Vijay Jindal said SitiCable would raise $200 million through private placement. "We are bringing down the size of the ADR issue as we are not raising it for convergence opportunities as we had planned earlier. We will only use the ADR proceeds for content opportunities," he said. Zee will be filing the prospectus with the Securities & Exchange Commission early next month.

The board, which met on Tuesday, also announced the unaudited results for the year ended 31 March, 2000. ZTL’s net profit has gone up to Rs 333 crore, up from 160 per cent from Rs 128 crore last year.

This is the first consolidated result after ZTL acquired the 100 per cent stake of Zee Multimedia Worldwide, a group company in December last year. Though Zee had made an enabling resolution to raise up to $1.5 billion through an ADR issue, the company feels that it does not require the entire amount at this stage. The proceeds from the ADR issue would be to used to invest in new media activities, acquire content and to boost its distribution network. Zee plans to list its proposed ADR on the New York Stock Exchange.

Meanwhile, the company’s operating profit has increased by 125 per cent to Rs 399 crore (including one time high value export of Rs 185 crore). Last year, it had posted an operating profit of Rs 177 crore.
"We have achieved a delicate balance between planned growth and profit. We are excited with our growth spiral," Jindal said.

While ZTL’s (pre-merger) net profit stood at Rs 267 crore, ZMWL posted a profit of Rs 101 crore. But ZMWL wrote off Rs 35 crore towards the launch of new channels. This brought the consolidated net profit to Rs 333 crore. ZTL’s profits for the year ended March 31, 2000, was on the strength of the merger, acquisition and high sales turnover, media analysts said.

Zee has identified Internet and cable as its future growth prospects.
"We are moving optical fibre into cable and converting it into hybrid fibre coaxial along the lines of the networks in the US and Europe," Jindal said. Recently, it acquired a 61 percent stake in Asianet Communication Ltd in April this year, which will give it a foothold in the southern Indian television audience market.

S.D.