Sun TV lines up Rs 200-cr capex Rs 260 cr for movie business

The Kalanithi Maran-run Sun TV Network Ltd has budgeted Rs 180-200 crore as capital expenditure (capex) for the current financial year, which will mostly be spent on programming operations and upgrading equipment. Besides, the company has lined up Rs 250-260 crore to acquire movies for distribution.

“Normally, we have an internal allocation of budget for capex of about Rs 100 crore on an annual basis, and this year, for the HD (high definition) boxes, we had a budget of Rs 40 crore that could go up to Rs 60-70 crore,” said V C Unnikrishnan, chief financial officer of Sun TV. “We are also looking at upgrading some of the production and programme equipment. During the current year, we will have Rs 150-200 crore in the capex for the programming side.”

 

Commenting on the movie acquisition plan, he said: “Costs of movies across the states have gone up and in specific markets also, (the business plan) depends on the blockbuster movies coming up.”

Last year, about Rs 300 crore was spent on movies and this year, it should be in the range of Rs 250-260 crore, Unnikrishnan said. The company’s movie distribution arm, Sun Pictures, will spend the money. In 2011-12, Sun Pictures acquired the distribution right of two movies.

He added the company had paid advances for blockbuster movies in Telugu and Tamil, which together would make up a big cluster.

Commenting on a jump in advances to the tune of around Rs 300 crore, Anthony D’Silva, group chief executive officer, said it was a combination of advances paid to production houses to block big-ticket movies and money spent on buying equipment for HD and upgrading facilities.

“So, there is a lot of capital upgrades that are in process now and that is what it was contributing to this.”