The BSE-listed Pentamedia Graphics Ltd, an animation technology company, has decided to exit from India's largest multiplex company Mayajaal Entertainment Ltd, which owns over 30 acre of property near Chennai.
The move follows Mayajaal's decision to join hands with realty firms to develop a Rs 300-crore villa project and also other real estate projects on the site.
V Chandrasekaran, chairman & CEO, Pentamedia Graphics Ltd, said, “With the present trend and business conditions, the company is relooking at its investments in Mayajaal Entertainment and to associate only with the line of activities or business connected only with technology and animation.”
He added that Mayajaal wanted to exploit the land bank to build real estate projects. “We don't want to be in the real estate business, since it will take time for gestation and it is a long-drawn and large funding proposal. So we are looking to divest our investments. The proceeds will be utilised to clear the debts of the company,” said Chandrasekaran.
Pentamedia picked up a 48 per cent stake in Mayajaal in 2004 with an investment of around Rs 38-40 crore. According to market sources, the company is likely to exit with around Rs 70-75 crore.
B Udeep, managing director, Mayajaal Entertainment Ltd, confirmed the development, but refused to comment on the value. He added that the company was planning to join hands with leading real estate developers to promote 100 high-end villas, which would have a total sale value of Rs 300 crore.
He said the villa project would come up on a nine-acre site and would be developed in two phases over the next three years. It will be developed through a special purpose vehicle, in which Mayajaal will hold 50 per cent, he said.
Sources close to the development said Kotak Realty Funds Group, a real estate private equity arm of Kotak Bank, is one of the forerunners in talks with Mayajaal.
It may be noted that Kotak Realty Funds Group acquired a 20-acre plot in Old Mahabalipuram Road from Pentamedia Graphics in 2007. The land was acquired under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act, 2002.
Kotak Realty Funds Group manages three funds -- Kotak India Real Estate Fund I, Kotak Alternate Opportunities India Fund, and a $281 million offshore fund.
While refusing to comment on Kotak, Udeep said, “We are constantly looking for third-party funding including private equity for our expansion and other projects.”
Mayajaal Entertainment currently operates 14 screens, which makes it the country's largest multiplex, and is planning to expand to 16 before Chrismas. The company is also planning to convert its 40-room resort to 120-room high-end SPA resort, said Udeep.
