Blackstone To Scale Down Investment In Ushodaya
Blackstone has reportedly put in a freshly amended application for investing in media company Ushodaya Enterprises. Business Standard reports that the global private equity fund has reworked the proposal to scale down the investment to $150 million from the earlier proposal of $275 million in equity. According to the new application, the firm proposes to pick up around 14 per cent stake (as against the earlier 26 per cent for Rs 1,081 crore), the report said. This could probably speed up the government approvals.
The government had not approved Blackstone’s proposal to invest in Ushodaya even after a year of the agreement. The deal was stuck as certain Congress leaders in the state raised several questions on the end use of capital and also their relationship to Margadarshi Financiers, a chit fund. Hindustan Times and its sister newspaper Mint yesterday carried a story on why the government is delaying the approval process. The report alleged it’s politics and not economics that is stopping the government from clearing the deal.
Probably, in order to circumvent the foreign investment rules, Ushodaya is also reportedly looking at selling another 12 per cent stake to certain India investors. The BS report names NRI businessman C Sivasankaran as one of the probable investors. As per the original proposal, announced in January 2007, Ushodaya planned to raise $465 million, with Blackstone investing $275 million and $190 million raised through bank financing.
