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Saturday, January 28, 2006

Sun Network to go public by mid-2006

Sun Network, one of India's largest media companies is planning an IPO this year, and will launch a slew of new television and radio channels. All these plans, even as the company's cable distribution arm could soon be taken over by the Tamil Nadu state government.

The Sun network which owns popular TV channels like Sun TV, KTV and Surya will finally go public by the middle of this year. Sun network's
Sumangali is the biggest - controlling about 85% of distribution in Chennai and is a monopoly in smaller cities like Trichy, Madurai and Coimbatore. Sources tell CNBC-TV18 that the company which also runs several newspapers and radios stations across South India plans to raise about Rs 800 crore and has appointed DSP Merril Lynch and Kotak Securities as book running lead managers.

Sun TV officials refuse to confirm whether they are indeed planning an IPO, but sources tell us that not only that the company also plans to launch a slew of new channels including one for children and a 24 hour sports channel. Sources also say the money will be used to beef up Sumangali Cable Vision, Sun TV's cable distribution company that dominates the business in Tamil Nadu.

It is this dominance that Jayalalitha says she wants to end with a new bill that proposes the state takeover of big multi-system operators or Multi Syatem Operators, MSO, in Tamil Nadu. But legal experts say such a bill cannot be passed by the State Government as MSO are governed by central law which is why a similar bill was rejected by the Tamil Nadu governor in 2002. But industry sources say this issue will soon blow over and Sun IPO will go ahead as planned.



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