Rupert Murdoch’s Star India has applied to the Foreign Investment Promotion Board (FIPB) for permission to raise its stake in DTH operator Tata Sky from 20% to 29.8%.
If approved, the deal will see Star pick up a 49% stake in TS Investments, an unit of…
Rupert Murdoch’s Star India has applied to the Foreign Investment Promotion Board (FIPB) for permission to raise its stake in DTH operator Tata Sky from 20% to 29.8%.
If approved, the deal will see Star pick up a 49% stake in TS Investments, an unit of the Tata Group, which will then buy a 20% stake in Tata Sky for around US$70m, raising Star’s ownership to just under the 30% mark.
The Australian-born American media mogul 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.
Despite this new clause, the FIPB has deferred approval in order to study the Star proposal more closely.
Tata Sky, which has around 4.5 million subscribers, is India’s second-largest DTH service provider after Zee Group’s Dish TV.
Tata Sky sold a 10% stake for US$56m to Singaporean state-owned investment firm Temasek in 2007. The Tata Group is the majority shareholder in the firm.