YES Bank, the largest shareholder in Dish TV India with a 25.6 per cent stake that it acquired by way of loan recovery, is planning to sell its holding in the satellite TV broadcaster to Tata Sky and Bharti Airtel. Other institutional investors, who jointly own 45 per cent in Dish TV, are also keen to sell their stake, according to banking sources.
Talks with both Tata Sky and Airtel are underway and a final decision is expected soon, the sources said.
YES Bank and Dish TV are engaged in a bitter legal battle over the control of the company. The promoters, the Subhash Chandra family, currently own only 6 per cent in the company, and are running its day-to-day affairs.
The spokespersons for Tata Sons and the Essel group declined to comment. An email sent to Bharti Airtel did not elicit any response.
The acquisition by either Tata Sky or Airtel will help them consolidate their market share. Currently, Tata Sky is the market leader with over 33 per cent share, followed by Airtel and Dish TV.
For the fiscal ended March 2021, Dish TV reported a total income of Rs 1,774 crore and a loss of Rs 677 crore. The company had a market valuation of Rs 3,268 crore as on Friday.
The potential transaction may take place after the Bombay High Court gives its judgment on a petition filed by a promoter-owned entity, World Crest Advisors, which had objected to YES Bank acquiring a stake in the company. YES Bank had invoked the promoters’ stake after they defaulted on Rs 5,270-crore loans.
The tussle between the lender and Dish TV promoters began in February last year, when Dish TV cleared a rights issue to raise up to Rs 1,000 crore. This, according to YES Bank, would have diluted its stake in the company and raised the promoter shareholding.
The bank then issued a notice to the company, asking it to convene an extraordinary general meeting (EGM) of shareholders to restructure the board.
As the company did not take any action, the bank filed a petition before the National Company Law Tribunal, Mumbai, under Section 98 of the Companies Act 2013, praying that the NCLT direct the convening of Dish TV’s EGM. The matter is pending before the NCLT.
In September 2020, Essel Group patriarch Subhash Chandra had filed a police complaint alleging that fraud by YES Bank’s former management led by Rana Kapoor had forced him to take over Videocon D2H, a rival company, to bail out the promoters of the group.
The Uttar Pradesh police decided to freeze the voting rights on YES Bank shares just before the AGM (annual general meeting), leading to a legal dispute between the bank and Dish TV, with the matter landing in the Supreme Court. The SC in an interim order restored the voting rights of the bank.
After the AGM was held on December 30, the company has not disclosed the results, saying it would do so in court. The Supreme Court has listed the matter for January 12, and both parties have time to settle the matter by then. Business Standard News