InvestorQ : Why was the NDTV deal done so quietly by Adani and are the promoters of NDTV right in protesting about the deal?
prachi Patwardhan made post

Why was the NDTV deal done so quietly by Adani and are the promoters of NDTV right in protesting about the deal?

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sara Kunju answered.
2 months ago
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There was a virtual furore as Adani Media bought a 29.18% stake in NDTV during the week. It was bought indirectly by taking over VCPL (Vishvapradhan Commercial) and exercising the warrants to take 99.5% stake in RRPR Holdings. This effectively gave Adani group 29.18% stake in the target company, NDTV. Prannoy Roy and Radhika Roy will eventually have to cede control of NDTV as that is what even the shareholders appear to want. But the question is how Prannoy Roy actually let NDTV go away. He did not have a choice.

The background is something like this. In 2009, VCPL had lent Rs400 crore to Prannoy Roy and Radhika Roy. The caveat was that if the loan was not repaid, the warrants issued to VCPL would be convertible into 99.5% stake in RRPR Holdings, which held 29.18% of NDTV. VCPL changed several hands including with Mahendra Nahata in last 13 years but eventually it was taken over by Adani. This led to conversion of the warrants giving Adani group 29.18% stake in the NDTV business. It has been a rather long trail.

Prannoy and Radhika Roy may appear naïve trying to look shocked at the deal. They claim they were not in the loop, but that is trying to be too naïve. Roy’s contention is that since they were in capital market ban, shares could not be transferred. However, that is just a technical issue. NDTV knew if the loan was not repaid the lender could convert warrants into shares. Surprisingly, it raises questions since the loan was interest free with no clause for repayment. Hence NDTV promoters protesting looks quite ridiculous.

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