Date:29/01/2007 URL: http://www.thehindu.com/2007/01/29/stories/2007012919760100.htm

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Blackstone to invest in Eenadu group

Special Correspondent

New York-based company to also get representation on UEL Board

UEL to raise $465 mn comprising $275 mn by Blackstone and $190 mn of bank finance

Transaction subject to regulatory approval by the Foreign Investment Promotion Board

HYDERABAD: Ushodaya Enterprises Limited (UEL), a leading Indian media company based here, on Sunday announced its Board of Directors' approval of an agreement with the Blackstone Group wherein the latter and its affiliates would acquire a stake in it. The Blackstone Group would also get representation on the UEL Board. As part of this transaction, UEL expects to raise $465 million comprising a $275-million investment by Blackstone and $190-million of bank financing. No further terms of the deal were disclosed. The transaction is subject to regulatory approval by the Foreign Investment Promotion Board and the Ministry of Information and Broadcasting. Kotak Investment Banking acted as the sole investment banking advisor to the transaction, according to a press release from UEL.

Founded in 1985

UEL owns the country's third largest newspaper, Eenadu and the fourth largest private television broadcasting network in the country, while the New York-based Blackstone Group, is a global private investment and advisory firm, founded in 1985.

Reacting to the development, Mr. Ramoji Rao, Chairman of UEL, said, "We were impressed with Blackstone's disciplined and highly rigorous investment process and the ability to combine this emphasis with a deep and genuine respect for the promoter's interests."

He said the company had access to several financing options, including an IPO. "But we decided to go with Blackstone because we believe that at this stage of our growth we have an opportunity to create significant value by leveraging Blackstone's outstanding experience and track record in the global media sector."

Mr. Akhil Gupta, Chairman and Managing Director of Blackstone Advisors India Private Limited, said "We believe that the Indian media sector will be a key beneficiary of a secular trend in growth in personal consumption that is driving India's economic expansion." This in turn would spur advertising growth and UEL would be an ideal platform for Blackstone to play this highly attractive sector in India, he added.