Adlabs to divest 7.5% to Bear Stearns

International equity placement firm BSMA, an affiliate of Bear Stearns Asia, has invested $6 million (approximately Rs 27 crore) in the multiplex business of Adlabs Films Ltd.

Adlabs Films today informed the Bombay Stock Exchange that an extra ordinary general meeting of the company will be held on May 12 to consider an increase in its authorised capital and preferential allotment of equity shares to BSMA at Rs 150 a share.

The allotment will represent a dilution of up to 7.5 per cent of the owner's stake in the Mumbai-based company, said company secretary Kirti Desai.

Promoters Manmohan Shetty and Vasanji A Mamania held 31.51 stake each as on March 31, 2005. While SBI-MF (Magnum Midcap Fund) held 2.28 per cent, FID Funds (Mauritius) Ltd 2.12 per cent, Morgan Stanley & Co. International Ltd held 1.42 per cent and Reliance Capital held 5.84 per cent.

"The fresh capital will be used to add more multiplexes in new cities," Desai said.

Today, the Adlabs scrip closed at Rs 132.45 on the Bombay Stock Exchange, up 3.15 per cent over its previous close.

Manmohan Shetty, chairman and managing director, said: "We are opening six multiplexes across the country. More will follow in the coming years and so the funds were sought."

After setting up four multiplexes in Maharashtra over the last six years, Adlabs' multiplex business is going national. Four new multiplexes are slated to come in Kolkata, Mangalore, Bangalore and Hyderabad in 2005.

The company will add 22 screens this year, taking its total count to 40. It has plans to set up 30 multiplexes, amounting to 150 screens, across India over the next four to five years. It has also acquired a 67-year old single-screen Metro Theatre in Mumbai, which will be converted into a multiplex in the near future.

Apart from the exhibition business, Adlabs has interests in the processing and production side of films.

The company is getting ready for some big releases this year. It has the Amitabh Bacchan starrer 'Waqt' slated for release this weekend. In June, it will release Raman Kumar's 'Dil Jo Bhi Kahe' and follow it up by Prakash Jha's 'Apaharan' in November.

The company has also forayed into its first English feature film starring Salman Khan. 'Marigold', currently under production, is slated for a 2005-end release.

Adlabs is the only listed entertainment firm straddling the distribution and exhibition segments. Shringar Cinemas Ltd, which raised about Rs 429 million in a recent initial public offering, is expected to list shortly.