DQE raises $50 million to beef up co-production pipeline

Proceeds of bond issue to fund development of 20 owned intellectual properties and co-production projects, debt repayment and working capital

DQ Entertainment (International) Limited, a Hyderabad-based animation, game art and entertainment company, through its holding company DQ Entertainment (Mauritius), executed documents on Tuesday to raise funds of up to $50 million (approximately Rs 305 crore).

The funds, raised by way of senior-secured convertible bonds from OL Master Limited, a private credit fund managed by OCP Asia (Hong Kong) Limited, can be drawn in two tranches – the first for $35 million to be drawn immediately and the second tranche of $15 million, which can be drawn down at the option of the investor within 12 months thereof.

In a release, DQE said the net proceeds from the issue of the bonds would be used to fund the development of more than 20 owned-intellectual property (IP) and co-production projects currently in the pipeline for production over the next two years, for the repayment of certain debts amounting to $7.21 million and for general working capital purposes.

Since June 2014, the board of directors of DQE has been exploring various options to secure the necessary funding for the group's pipeline of new projects, the bulk of which are children and family-oriented animation series for television and digital distribution.

DQE has a production order book worth approximately $63 million. Some of the projects in production include Robin Hood, Peter Pan season-II, Lassie, Miles from Tomorrow Land, Popples and Seven Dwarfs and Me, while production of new IPs such as 5 & IT, Yonagunis and Leo Galilei will commence soon, the company said.

DQE's scrip ended the trade at Rs 28.90 on the BSE, up 5.09 per cent, over the previous close of Rs 27.50 a share.