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| Pyramid Saimira to offload 40% in movie company |
| T E Narasimhan / Chennai Aug 26, 2009, 00:54 IST |
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To demerge television content production arm.
Chennai-based entertainment company Pyramid Saimira Theatre Ltd (PSTL) has decided to offload a stake of over 40 per cent in its movie production company to a Kolkata-based corporation. The new partner of PSTL is likely to infuse around Rs 100 crore.
In addition, as a part of its restructuring plan, PSTL has also decided to demerge its television content production company and is planning to sell its American exhibition company, too.
PSTL also informed the Bombay Stock Exchange today that its board of directors had considered and approved the raising of up to $100 million (around Rs 500 crore) through an international offering of securities, including Foreign Currency Convertible Bonds, Global Depositary Receipts and American Depositary Receipts, subject to necessary approvals. The company had earlier said it would raise the money through Qualified Institutional Placement.
On the offloading to a Kolkata-based company, PSTL Chairman P S Saminathan told Business Standard this corporation would acquire 42 per cent in PSTL’s production company. He declined to reveal the corporation’s name, which would become a co-promoter and a strategic partner in PSTL.
“The new partner will infuse Rs 100 crore, which would address the company’s immediate liquidity issue. The money will be utilised to restart production of 17 films, which have been kept on hold due to liquidity crunch,” said Saminathan.
The demerger would happen within 90 days after the Securities and Exchange Board of India and the Madras High Court give their approvals. The new company would target a turnover of Rs 300 crore in the first year of operations, according to Saminathan.
Similarly, the company would also demerge its content division company, he added. The new company would also be listed to raise money, with 25 per cent of the shares being held by the promoters. Another 40,000 shares would be given free of cost to PSTL’s shareholders, to compensate for the loss they incurred on the parent company. Commenting on the exhibition company, which is into the theatre business, Saminathan said it now had 250 screens in South India, down from the 750 it operated earlier.
The company would now work on a revenue-sharing basis with theatre owners, instead of the earlier fixed-rent basis. Currently, the company has 300 movies in its library, which was acquired for Rs 700 crore.
There are also plans to sell the American exhibition company, Fun Asia, in which the company had invested around $10 million, for $5-6 million (around Rs 25-30 crore). One of the prospective buyers of Fun Asia could be Reliance Entertainment, said Saminathan.
Earlier, the company had closed its two subsidiaries, Spice, which was a DTH subsidiary, and Aurona Technologies, a gaming business company. The loss of the two companies alone was around $10 million (around Rs 50 crore), which the company decided to write off.
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