Adani's possible NDTV takeover: How Rs 403-crore loan landed Roys in trouble

NEW DELHI: The Rs 403-crore loan taken by NDTV as early as 2009-10 has come back to haunt the Prannoy Roy-owned media company, again.

RRPR Holdings, which was a promoter group entity and then held only 7.56% stake in NDTV, took the loan on behalf of NDTV from Vishvapradhan Commercial Private Limited (VCPL) in two tranches (Rs 350 crore in July 2009 and another Rs 53 crore in January 2010).

As per the loan agreement, RRPR was required to issue warrants to VCPL, which were convertible equity shares aggregating to 99.99% of the share capital of RRPR.

The loan agreement also required Prannoy Roy and Radhika Roy, who together held 55.5% in NDTV at the end of June 2009, to transfer some of their shares to RRPR Holdings. Due to these terms, RRPR Holdings’ stake in NDTV increased to 29.18% by January 2010.

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VCPL, which has now been acquired by Adani group, has exercised the warrants to acquire 99.5% stake in RRPR, allowing Adani group to hold 29.18% in NDTV.VCPL, which had a turnover of just Rs 1 lakh in last two financial years, was long rumoured to be a shell company of Mukesh Ambani’s Reliance group.

However, who owns VCPL is shrouded in mystery. As per exchange filings, Adani acquired 100% in VCPL from Nextwave Televentures and Eminent Networks.  

The said loan has proved to be a bane for the promoters of NDTV earlier as well, as they have been subjected to a probe by the Securities and Exchange Board of India (Sebi), which found them in violation of SEBI Act.

Sebi found the NDTV promoters guilty of not disclosing the terms of the VCPL loan to investors. The same loan has now become the reason for what looks like a hostile takeover of NDTV by Adani.

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NDTV in an exchange filing said: “NDTV founders and the company would like to make it clear that this exercise of rights by VCPL was executed without any input from, conversation with, or consent of the NDTV founders, who, like NDTV, have been made aware of this exercise of rights only today.”

But can Prannoy Roy save his media empire from going into the hands of Adanis, especially since the latter has already announced that it would give an open offer to shareholders to buy another 26%.

“Prannoy can try and fight it out. It isn’t a lost cause yet,” says Shriram Subramanian, founder and MD of proxy advisory firm InGovern Research.