In an order sheet of the hearing held on July 11, the division bench of technical member Anu Jagmohan Singh and judicial member Kishore Vemulapalli asked the parties to serve a fresh notice of final hearing to the central/state governments, tax authorities, and regulatory bodies like the Competition Commission of India (CCI) and the Ministry of Information and Broadcasting.
The notices must contain the statement that if no response is received within 30 days, it will be presumed that the authorities have no objections to the scheme.
Himanshu Vidhani, partner at law firm Chandhiok & Mahajan, said the market understanding is that this scheme consists of two parts: (i) the transfer of certain identified assets of Viacom’s TV to Digital18, followed by the demerger and vesting of these identified assets from Digital18 to Star.
“The NCLT had by this order directed that this matter will be taken up for final hearing on 1 August, at which time the NCLT will decide whether the scheme should be sanctioned,” said Vidhani.“If the scheme is sanctioned, the same will have to be effective as per its terms and will then have to be submitted for adjudication of stamp duty with the superintendent of stamps,” he further adds.After the NCLT sanctions the scheme, the merger will require CCI clearance. The merger is currently being scrutinised by the CCI due to the potential impact it will have on the TV broadcasting and streaming businesses.
On May 7, the tribunal admitted the merger scheme between Star India, Viacom18, and Digital18, marking the first step towards completing the mega transaction.
During the hearing, the parties informed the NCLT that the scheme of arrangement between the three companies has been approved by secured and unsecured creditors besides equity and preference shareholders.
As part of the scheme of arrangement, Digital18 intends to transfer Viacom18’s assets to Star India, which will allot proportionate shares to the former. Star will also allot shares to RIL for a $1.4 billion fund infusion.
Following the allotment, Star’s shareholding will be divided among Walt Disney (36.63%), Digital18 (46.11%), and RIL (16.34%).
Star India and Viacom18 have agreed to merge operations, forming India’s largest media and entertainment business valued at $8.5 billion, with a combined FY23 topline of Rs 25,000 crore.
