Russia’s Rostelecom has acquired a 25.33% stake in Digital Television, a unit of the national broadcaster All-Russia State Television and Broadcasting Company (VGTRK).
The transaction is part of the December 2014 agreement between Rostelecom and VGTRK…
Russia’s Rostelecom has acquired a 25.33% stake in Digital Television, a unit of the national broadcaster All-Russia State Television and Broadcasting Company (VGTRK).
The transaction is part of the December 2014 agreement between Rostelecom and VGTRK to create a media joint venture.
The JV was formed between Rostelecom subsidiary NKS-Media and Digital Television, both of which both produce and distribute various pay-TV channels for cable and satellite broadcast.
As part of the deal, the state-controlled telco agreed to participate in an additional share issue by Digital Television, purchasing ordinary registered uncertified shares amounting to 25.33% the company’s enlarged share capital.
Rostelecom funded the purchase through its equity interest in NKS-Media and Rbs250m (US$3.6m) in cash. The company said the value of the assets it contributed to the JV amounted to more than Rbs1bn (US$14.5m).
Rostelecom president Sergey Kalugin stated that the company considered a number of options for developing its television channels before deciding to consolidate them with VGTRK’s media assets.
“We believe they will generate greater value as part of a larger JV with VGTRK rather than attempting to develop our media business as a standalone entity.
“This will enable the combined company to obtain a much stronger position in the market, manage its costs more efficiently and enhance a leadership in quality of content.”
The Digital Television group distributes 13 themed TV channels and three VGTRK sports channels and is set to launch a new channel ‘Animal Planet’.
Meanwhile, NKS-Media operates and distributes six TV channels and an internet portal.