Reliance Mediaworks to Raise $111 Million
DreamWorks' partner plans an equity sale to reduce company debt.
NEW DELHI -- The board of film and entertainment services company Reliance MediaWorks has approved raising an amount of up to $111 million “by way of rights offer of equity shares to the company’s shareholders, subject to necessary sanctions and applicable provisions of law," the company said in a statement.
Owned by DreamWorks' partner Reliance ADAG, RMW runs India's largest theatrical exhibition chain BIG Cinemas in addition to offering exhaustive film services with TV content produced via affiliate BIG Synergy.
“The funds raised through the rights issue would be utilized, inter-alia, for substantially reducing the debt of the company, incurred for creating the (RMW) asset base. The Board of Directors have empowered its Committee to decide upon the terms and conditions including the price, share entitlement ratio, timing and other details of the rights issue," RMW said in a statement.
For the quarter ended March 31, 2011, RMW declared a net loss of $36 million “which is not reflective of the future prospects of the company. The quarter has been exceptionally weak in film releases on account of cricket's ICC World Cup and also bears significant costs of interest and depreciation for the large capital expenditure projects commissioned across businesses during the year. These investments are expected to generate substantial returns in the coming year.
RMW's recent investments include the first phase launch of India’s largest Hollywood-benchmarked studio facility that comprises eight sound stages spread across 200,000 square feet in Mumbai's Film City complex with the studio set for further expansion.
BIG Cinemas' current screen count of over 550 screens will be expanded by an additional 60 screens in the next financial year.
RMW also established a media business processing outsourcing facility offering content processing, image enhancement and restoration services, VFX and 2D to 3D conversion services. The facility's existing 1,200 staff would be further expanded by 500 in the next financial year.