India's Reliance MediaWorks Reports Quarterly Loss

1:23 AM PST 08/14/2012 by Nyay Bhushan
Nyay Bhushan

The film major is expected to get a $112 million investment from L Capital, backed by luxury major LVMH and Group Arnault.

NEW DELHI – Film services and theatrical group Reliance MediaWorks reported a wider fiscal first-quarter loss of about $24 million (Rupees 1.3 billion) for the quarter ended June 30.

This compared to a loss of Rupees 1.2 billion for the same period last year.

Owned by diversified Indian conglomerate Reliance ADAG, which is a partner in a joint venture with DreamWorks, RMW runs three main units covering film and media services, theatrical - via India's largest cinema chain Big Cinemas - and TV production with Big Synergy.

Profit from operations was up 4.81 percent to Rs 2.02 billion from Rs 1.92 billion in the same period last year.

Film production services accounted for Rupees 478.8 million in revenues, while theatrical exhibition saw revenues of Rs 1.44 billion. TV, film production and distribution operations reported revenues of Rs 116.9 million in the quarter.
 
RMW's recently announced that it had signed a term sheet with a “leading international private equity fund” to invest about $112 million (Rupees 6.05 billion). A source told THR that the fund in question is “most likely” L Capital, the private equity arm of luxury major LVMH and Group Arnault. RMW did not comment.

If L Capital indeed invests in RMW in exchange for a “substantial minority” stake as announced earlier, this would be the fund's second foray into India's entertainment sector. L Capital recently invested $19 million (Rupees 1.08 billion) in exchange for a 10 percent stake in New Delhi-headquartered theatrical major PVR Ltd.

L Capital's other investments here include an eight percent stake in lifestyle retail chain Fabindia and a 40 percent holding in Genesis Luxury Fashion, which has local partnerships for various luxury brands, such as Canali, Paul Smith and Jimmy Choo.
 
In addition to the expected private equity investment, RMW has also filed for a rights issue with the Securities and Exchange Board of India (SEBI) to raise Rs 6 billion.
 
RMW's businesses include its Burbank-based image processing facility (formerly known as Lowry Digital) and India’s largest Hollywood-benchmarked studios, RMW Studios with 200,000 square feet, which include eight sound stages spread across a 7 acre area within Mumbai's Film City complex.

Diversified conglomerate Reliance ADAG (Anil Dhirubhai Ambani Group) is the conglomerate that is equal partners with DreamWorks. It separately owns India-headquartered Reliance MediaWorks, which runs its various businesses, including its overseas film services units.

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