Aplab stake to help cable network: Zee

MUMBAI: Indian television and media company Zee Telefilms Ltd. said on

Tuesday that its plan to acquire a 26 per cent stake in electronic firm Aplab

Ltd. was part of a long-term strategic initiative in the convergence business.

"Siticable, a subsidiary of Zee, is expected to derive synergy from the

hardware and software technologies of Aplab by enhancing the distribution of

broadcast media through its cable networks," Zee said in a statement.

It said the cable network could benefit from the enhanced business

applications of the hardware products of Aplab.

Aplab said in a statement to the Bombay Stock Exchange that its board on

Monday approved the proposed preferential allotment of 1.32 million shares at Rs

90 per share to Zee.

Siticable Network, Zee's cable arm, is India's largest cable system operator.

Analysts said the acquisition provided a perfect fit to the company's foray into

broadband access and convergence.

"Zee will gain by getting control of a set-top box manufacturing

facility...it is probable Aplab may even start making signal amplifiers,"

said an analyst at a domestic brokerage.

Zee's statement said Aplab's core business comprised of making test and

measuring equipment, petrol dispensers, smart card applications and set-top

boxes.

Earlier this month, Zee said it plans to raise $250 million through the sale

of less than 10 per cent of its stake in Siticable.

Zee managing director Vijay Jindal said that by doing so, Zee hopes to unlock

the high valuations commanded by cable firms due to their vast distribution

networks and the new technologies they are capable of offering through their

cable.

Zee said that the Aplab stake acquisition will add to Siticable's position in

the emerging convergence business. It expected the firm to capitalize on the

bandwidth capabilities of cable network distribution.

In today’s afternoon trade, shares of Zee were Rs 29 higher at Rs 478 while

Aplab's shares were up by Rs 2.75 at Rs 37.50.

(C) Reuters Limited 2000.