Having only withdrawn its initial proposal last month after regulatory approval looked unlikely, Star India has now filed a modified application to the Foreign Investment Promotion Board (FIPB) for permission to raise its stake in Tata Sky from 20% to…
Having only withdrawn its initial proposal last month after regulatory approval looked unlikely, Star India has now filed a modified application to the Foreign Investment Promotion Board (FIPB) for permission to raise its stake in Tata Sky from 20% to 29.8%.
If approved, News Corp subsidiary Star would pay around Rs3.24bn (US$70m) for the increased stake.
Under the terms of the proposed plan, Star would pick up a 49% stake in TS Investments, an investment unit of the Tata Group, which would then buy a 20% stake in Tata Sky for around US$70m, raising Star’s ownership to just under the 30% mark.
News Corp is attempting to take advantage of a change in Indian legislation pertaining to FDI made last year. The current law stipulates that foreign investment in Indian DTH operators cannot exceed 20%. However, foreign entities are now permitted to buy an additional 29% if the investment is made through companies owned and controlled by Indian nationals.
The Tata Group holds 70% in Tata Sky, while Singaporean state-owned investment group Temasek owns 10%.
Tata Sky, which has around 4.5 million subscribers, is India’s second-largest DTH service provider after Zee Group’s Dish TV.
