Pyramid Saimira plans film fund

Pyramid Saimira Theatre (PSTL) is planning to approach the Securities and Exchange Board of India (Sebi) for its proposed Rs 250-crore film fund.

The company is also planning to speed up its investment plans involving around Rs 400 crore.

The Chennai-based entertainment company was in the news after it said that a letter issued by the regulator about its open offer was a forged one and has called for an investigation into the issue.

Speaking to Business Standard on Wednesday, P S Saminathan, chairman, PSTL, said the company is planning to foray into film finance business, for which it is planning to file a new film fund of Rs 250 crore by mid-January next year with the regulator. The company plans to go to the market to raise another Rs 250 crore once the initial Rs 250 crore gets fully deployed, he said.

 

The new fund will be used to support mid-tier budget films costing around Rs 3-5 crore. PSTL will fund 75-80 per cent of the total production cost. Negotiations have already started with producers and the first movie will be funded in April 2009, said Saminathan.

He noted that over 80 per cent of the films produced in the country were mid-tier films. Moreover, film financing business is one of the successful businesses at present. According to him, the current NPA level for film financing is 8-9 per cent and net margin at 14 per cent.

About expansion and investment plans, Saminathan said that the company is planning to invest around $40 million (around Rs 200 crore) in China to open 300 screens by 2012. In the domestic market, PSTL is planning to increase the number of screens to 1,000 from the current 750, which would require around Rs 125-140 crore.

The company’s focus would be tier-II cites in south India through acquisitions.

PSTL has set a target of Rs 500 crore as turnover for the next year. In 2009, it is planning to produce 34 mid-tier films and one big movie, which would cost around Rs 60-80 crore. The proposed investment would be funded through debt and equity. He noted that Exim Bank has already sanctioned Rs 50 crore to the company for this purpose.

The group has set a target of Rs 5,000 crore turnover by 2010-11 from the current Rs 1,400 crore.