Dish TV CMD Jawahar Goel justifies merger deal with Videocon d2h

Dish TV chairman and managing director (CMD) Jawahar Goel has justified the company’s decision to go in for a merger deal with Videocon d2h by stating that the merger has been a great strategic fit.

His view is at variance with that of his cousin brother and Essel Group chairman Subhash Chandra, who, in his letter to the lenders, had termed the acquisition of Videocon d2h by Dish TV as a bad business decision.

Goel was speaking with analysts during a conference call in the aftermath of the drastic fall in the company’s market cap and the share price. Even before any analyst could quiz Goel about Chandra’s statement, he made it clear at the beginning of the call itself that the merger has been successful.

“Before I take questions, I would like to reiterate that Videocon d2h has been a great strategic fit and its merger with Dish TV has provided immense growth opportunities to the company with significant potential to unlock going forward,” Goel said during the call with analysts.

He also stated that the synergies driven out of the merged business will subsequently strengthen the profitability of the company. Goel, however, acknowledged that the open offer made by promoters had put the promoters under financial stress.

Asked about Chandra’s statement about Dish TV-d2h merger in the letter addressed to lenders, Geol explained that the merger of d2h business into Dish TV has worked out well. However, the open offer has caused financial stress to the promoters.

“There are two parts of this Videocon merger. One is the merger of the business into the company. So that is a very good opportunity, we are proud to have that and the combined synergy is very good. But part 2 is when we made an open offer as a promoter that gave us stress that we have to pledge our shares and all these things and take the additional financial burden on the promoter’s side books, not in the company,” he said.

He also clarified that the promoter stake sale is limited to ZEEL and there is no pressing need for Dish TV to walk the same path. That said, the company is open to strategic partnerships at a better price.

“Well as a promoter family I can say that we are only targeting the part shares of ZEEL and there is no other pressing need for considering Dish TV to do that. But definitely, the control of shareholding and we have sufficient shareholding with the promoter. If a strategic partner comes at a later stage in a year or two years’ time at a good price at that time we will see and let you know,” Goel averred.

He also said that 82% shares of the promoter shares in Dish TV are pledged. The promoter shareholding currently stands at 59.1%.

Commenting on the new tariff order of the Telecom Regulatory Authority of India (TRAI), Goel said that the company has written a letter to TRAI to clarify that the distribution platform will merely be a commission agent and content cost will be a pass through. The TRAI, Goel said, has agreed to come out with a consultation paper on the same.

“With the new regime of tariff order by TRAI, any revenue passed through the broadcasters we are merely a commission agent. So, we had written a letter to TRAI and TRAI in the month of February they promised to come out with a consultation paper that the content cost should be a pass-through item, so that claim is also pending. Our issue is pending before the telecom regulator,” he stated.