Reliance MediaWorks Board Approves Subsidiary Spinoffs
The diversified group will use the combined fund raising activities to service its $300 million debt, RMW CEO Anil Arjun tells THR.
NEW DELHI – Diversified film services group Reliance MediaWorks (RMW) announced that its board has approved the transfer of the company's cinema exhibition and film and media services into separate 100% subsidiaries subject to shareholder approval.
Owned by DreamWorks' equal partner, conglomerate Reliance ADAG group, RMW owns India's largest theatrical chain, Big Cinemas – which operates over 530 cinemas in India and overseas – while the group's film and media services business includes digital post production facilities and a recently built studio facility in Mumbai's Film City.
“The subsidiarization step is a precursor to invite strategic and private equity investors who have expressed a keen interest in investing in specific businesses,” RMW said in a statement. “The proposed subsidiarisation will better position the company to pursue strategic growth opportunities in its specific businesses and enable the company to enhance its business, revenues and profitability and also expand products and service offerings.”
“Our various businesses are now quite mature given the strong growth we have had in the last five years,” RMW CEO Anil Arjun told THR. “Our theatrical business and film services unit have a combined asset base of $400 million. A final valuation of these two planned subsidiaries is being done based on which the size of proposed equity investment in these units will be determined.”
Arjun also added that after RMW's board approved a proposed rights issue last year to raise $111 million, the “rights issue is being planned for March as a parallel activity. With RMW facing a debt of about $300 million, the combined rights issue and proposed equity investment will dramatically reduce the company's debt.”
Arjun did not indicate what kind of equity investors were being targeted for the investments in the proposed subsidiaries and only stated that “there is interest from key players,” hinting at possible overseas investors.
“RMW has gone through the initial growth phase and risk period for these business units. Its now time to build focus with the right kind of partner,” he added.
Television production unit Big Synergy, in which RMW holds a 50 percent stake, will continue to be a part of the group.
Meanwhile, RMW recently announced the appointment of Venkatesh Roddam as the CEO of the group's Film and Media Services division and will be based at RMW's offices in Los Angeles, reporting to Mumbai-based Arjun. The appointment follows RMW's alliance with South India-based VFX and film and TV services group VenSat Tech Services – cofounded by Roddam – whose latest credits include superhero caper Ra.One, among others.
RMW's film services business expanded internationally when it acquired Burbank-based DTS Digital Images – popularly known as Lowry Digital Images founded by John Lowry – in April 2008 for about $7.5 million in cash. Key executives from RMW's Global Imaging Technology Center – including DTS Digital Images founder John Lowry -- will be honored at this year's AMPAS Scientific and Technical Awards to be held on February 11 for its film restoration technologies which were used to restore classics including Casablanca.