Hathway subscribers from these cities and certain parts of Maharashtra would be deprived of viewing 33 TV channels offered by Zee Turner. Hathway’s IPO also received a lukewarm response from investors
Zee Turner, a joint venture between the Turner Group and the Essel Group, said that it has stopped its cable TV transmission to Hathway Cable & Datacom Ltd from Thursday due to non-payment from the cable operator.
In a release, Zee Turner said 33 popular Zee Turner channels are being switched off the Hathway cable network in Delhi, Pune, Bengaluru and parts of Maharashtra, while some parts of Mumbai have been already switched off due to payment default.
“From today we are switching off our services from cities in Maharashtra such as Pune, Aurangabad, Nashik, Nanded and Latur. The services will remain switched off till Hathway fulfils their contractual liabilities,” said Dinesh Jain, chief executive, Zee Turner.
The channels that may go off air for Hathway customers include Zee TV, Zee Marathi, Cartoon Network, Pogo, HBO, CNBC TV 18, Zee Cafe, Zee Studio, Zee Cinema and 24 other channels.
Zee Turner said Hathway is not coming forward to sign the new agreement documents for airing these 33 channels after the earlier contracts expired a year ago. The broadcaster has urged viewers to deduct money before paying to the cable operator as it has already switched off its services.
Zee Turner also claims that there is widespread misreporting of subscriber figures in Hathway’s cable television business. “In the draft red herring (IPO) prospectus (of Hathway) filed with SEBI, they have mentioned that the total number of subscribers is nearly 2 million, and they are also advertising that they have 8 million subscribers; whereas for the cable business, they have declared only about four lakh (subscribers), thus concealing a large portion of their subscriber base,” said a Zee Turner spokesperson.
Hathway officials were not immediately available for comments.
Meanwhile, Hathway’s foray into the capital market was muted with its initial public offering (IPO) receiving a lukewarm response from investors. The IPO closed for subscription on Thursday.
“There are two issues running simultaneously, the ARSS Infrastructure Projects issue and Hathway’s issue. ARSS issue attracted a lot of retail and non-institutional investors’ attention while Hathway got a lukewarm response. According to our figures, Hathway’s IPO was subscribed 1.32 times till 2pm, which indicates a marginal oversubscription,” said Maju Nair, assistant vice president for mutual funds and IPO distribution, Sharekhan Ltd.
According to the data provided by Sharekhan, retail investors have shunned the Hathway IPO. The retail investors’ quota was subscribed just 0.2 times, while the quota for qualified institutional buyers (QIB) and non-institutional investors was subscribed 1.43 times and 1.32 times, respectively.
While retail investors may have ignored the IPO due to the prevailing market conditions, there are some serious issues—including conflict of interest between the company and its subsidiaries, and pending court cases. (Read more)
Hathway has consistently incurred net losses of Rs62 crore, Rs67 crore and Rs63 crore during FY07, FY08 and FY09, respectively. These losses were primarily due to depreciation and amortisation, including purchase of set-top boxes, said the red herring prospectus. As of September 30, 2009, it reported a debt of Rs458 crore on a standalone basis and Rs499 crore on a consolidated basis.