Blackstone takes stake in India's UEL

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NEW DELHI -- U.S.-based private investment firm Blackstone Group on Sunday said that it will invest $275 million to acquire a stake in South India-based UEL (Ushodaya Enterprises Ltd.), in what is seen as the largest-ever foreign investment in the Indian media segment.

UEL is the holding company for the Eenadu media group, whose various interests include newspapers, television and Ramoji Film City, a 1,600-acre film production facility based in Hyderabad, South India.

Blackstone did not confirm the extent of equity it has acquired in UEL but media reports Monday speculated that this could be about 26%, reflecting UEL's enterprise valuation at an estimated $1.1 billion.

UEL is additionally raising $190 million from bank financing, raising its capital base to $465 million.

Meanwhile, Blackstone's investment is still awaiting regulatory approval by India's Foreign Investment Promotion Board and the Ministry of Information and Broadcasting.

"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," UEL chairman Ramoji Rao said in a statement.

Added Akhil Gupta, chairman and managing director of Blackstone Advisors India Private Ltd.: "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, which in turn will spur advertising growth. Importantly, we believe that UEL is an ideal platform for Blackstone to play this highly attractive sector in India."
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