Television broadcaster NDTV Ltd said it was selling part of its stake in Red Pixels Ventures Ltd, an online focused subsidiary, to pay rent and meet other working capital requirements.
NDTV Ltd holds about 37.04% of the online-focused outfit.
NDTV said its board has approved the transfer of “up to 7.38% stake of the company (NDTV) @ Rs 59,824 per equity share” in the unit to AR Chadha and Co, the landlord of its office premises in New Delhi.
It said its stake will be reduced, depending on whether other shareholders in Red Pixels exercise their tag along rights.
Tag-along rights, also referred to as “co-sale rights,” are contractual obligations used to protect a minority shareholder, usually in a venture capital deal. If a majority shareholder sells his take, it gives the minority shareholder the right to join the transaction and sell his minority stake in the company.
The proceeds will be used for “working capital, including in relation to payment of outstanding rent by the company,” it added.
NDTV, one of India’s oldest private broadcasting firms, has found the going tough after the 2008 financial crisis hit just when the company had leveraged itself heavily to diversify into non-news broadcasting.
However, the company’s online properties are among the most successful in India.