Foreign investors including 3i Sports Media, a subsidiary of UK-based private equity firm 3i, and Oman Investment Fund have received approval from India’s Foreign Promotion Investment Board to invest INR2.6 billion ($52 million; €40 million) in India’s Neo Sports Broadcast, according to Indian newspaper Business Standard.
Neo Sports Broadcast is the holding company for sports channels Neo Cricket and Neo Sports. Nimbus Communications holds the television broadcast rights for all domestic and international cricket matches in India till March 2010.
The additional capital will be used by the company to add two new channels focused on lifestyle and films respectively, the paper noted. “We will use the funds to create a programming and telecast rights corpus. We will also launch two niche channels in the last quarter of 2009, which will be in the non-sports genre,” Harish Thawani, chairman of Neo Sports Broadcast, told Televisionpoint.com.
The company will receive the funds by issuing fresh equity shares and equity-linked instruments such as compulsory convertible preference shares.
In March, 3i sold a stake in Mundra Port and Special Economic Zone for INR1.7 billion through an open market bulk deal on India's National Stock Exchange. In February, it invested $161 million for a minority stake in Krishnapatnam Port Company from the 3i India Infrastructure Fund, which closed on $1.2 billion in March 2008.
Neo Sports is a subsidiary of Nimbus Communications in which Oman Investment Fund and 3i already owned stakes. 3i invested $45 million in Nimbus in 2005, reportedly for a stake of about 33 percent.
Oman Investment Fund could not be reached. 3i declined to comment.