DEN, Hathway shareholders approve stake acquisition by Reliance

The shareholders of multi system operators (MSO) DEN Networks and Hathway Cable and Datacom have approved the stake acquisition by Reliance Industries Ltd (RIL).

The shareholders of both the companies have overwhelmingly voted in favour of issuing preferential shares to RIL and increasing the paid-up capital of the company.

The promoters, public institution and public non-institution of both the companies voted in favour of the deal with RIL.

Following the shareholders’ approval, the authorised share capital of DEN will increase from Rs. 200 crore to Rs. 500 crore while Hathway’s authorised share capital will go up from Rs. 200 crore to Rs. 400 crore.

On 17 October, RIL had agreed to acquire controlling stakes in DEN Networks and Hathway Cable and Datacom as part of its plan to launch JioGigaFiber in 50 million homes. The Mukesh Ambani-led company will pump in Rs 5,230 crore to take control of the two companies.

RIL has picked up 66% stake in DEN Network for Rs 2290 crore which includes a primary investment of Rs 2,045 crore through a preferential issue and secondary purchase of Rs 245 crore from the existing promoters.

The oil to telecom conglomerate has also made a primary investment of Rs. 2,940 crore through a preferential issue 51.3% stake in Hathway Cable and Datacom.

The company will also make open offers in DEN and Hathway as well as GTPL Hathway, a company jointly controlled by Hathway with 37.3% stake, and Hathway Bhawani Cabletel and Datacomm, a subsidiary of Hathway.

DEN board had approved the allotment of 28,14,48,000 equity shares of face value Rs 10 each at an issue price of Rs. 72.66 per equity share on preferential basis to RIL subsidiaries Jio Futuristic Digital Holdings, Jio Digital Distribution Holdings, and Jio Television Distribution Holdings.

The existing promoters Sameer Manchanda, Lucid Systems and Verve Engineering have entered into a share purchase agreement (SPA) for sale of 3,35,85,000 equity shares of the company at a per share price of Rs. 72.66 to Jio Futuristic Digital Holdings.

The Hathway board had also approved the allotment of 90,88,10,000 equity shares of face value Rs. 2 each of the company at an issue price of Rs. 32.35 per equity share on preferential basis.

In connection with the proposed preferential allotment, the parties have executed an SSA and SHA between the company, the promoter group comprising Akshay Rajan Raheja, Viren Rajan Raheja, Hathway Investments, Spur Cable and Datacom and Jio Content Distribution, Jio Internet Distribution and Jio Cable and Broadband Holdings.

The two companies noted that the execution of the SSA shall attract an obligation on the Investors to make an open offer to the shareholders of the Company under applicable provisions of the SEBI (Substantial Acquisition and Takeovers) Regulation, 2011.