Not in talks with Bharti Airtel for selling Dish TV – YES Bank

YES Bank, the single largest shareholder of DTH company Dish TV, today said it has not been approached by Bharti Airtel for buying the stake in Dish TV.

Prashant Kumar, the MD & CEO of the bank, however indicated that bank is not averse to selling its nearly 26% stake in the company for the right valuation.

“Depends on what kind of offer comes,” he said in a TV interview today.

His comments come in the wake of a Supreme Court decision to quash a directive by UP Police which sought to prevent YES Bank from selling its stake in Dish TV.

Bharti Airtel is one of India’s top three DTH operators, and the only one with the financial muscle and growth plans big enough to accommodate a company the size of Dish TV. The company is trying to merge and cross sell its DTH and broadband services products into one consumer offering.

YES Bank ended up owing close to 26% of Dish TV after the ownerers of the shares — various entities and persons related to Dish TV promoter Subhash Chandra family — ended up defaulting on loans they had taken from YES Bank. Dish TV promoters had pledged their shares in the DTH operator as collateral security for the loans.

Asked if YES Bank will sell its Dish TV stake only if it can recover the entire amount outstanding in the form of the loans, Kumar indicated that may not be the case.

“It is not about breaking even [on the loan exposure], but about the realistic valuation of the enterprise,” he said, referring to Dish TV.

“Sometimes it is not possible to recover the entire value, and the intrinsic value of the company may not be equal to [the outstanding amount]. But we’d like to realize the intrinsic value,” he said.

Separately, YES Bank has been trying to replace most of the company directors, alleging that they are not acting in the interest of all shareholders, but only those of a tiny minority.

Dish TV, on its part, has been fighting tooth and nail to thwart YES Bank’s attempt to bring before shareholders a resolution seeking to remove these directors.

The DTH company has already postponed its annual general meeting twice after it became known that YES Bank would table a resolution seeking the reconstitution of the board of directors.

The AGM is now scheduled to take place at the end of this month, and both sides are learnt to be trying hard to win the support of other shareholders in the tussle.

Prashant Kumar said YES Bank has no interest in Dish TV other than to recoup its loan/investment.

“As a lender, we have the right to protect the value of our security. That’s all we are trying to do,” he said.

To do this, he said, it is important to unlock the true value of Dish TV shares.

“If the issues related to the company, including corporate governance issues, [are resolved], the intrinsic value will be realized,” he added.

The Subhash Chandra family ended up defaulting of many of its loans after facing reversals in some of its business, such as those in infrastructure and construction.