The Anil Ambani-promoted Reliance MediaWorks Ltd (RMW) is signing a term sheet with an international private equity (PE) firm for Rs 605 crore for its film and media services division. The investor’s name was not disclosed.
Under the terms of the pact, “Reliance MediaWorks and the investor have agreed to an exclusivity for the next 90 days. The proposed investment is subject to completion of customary detailed due diligence, definitive documentation, completion of subsidiarisation of the film and media services business, and approvals as may be necessary,” RMW said.
RMW’s scrip closed at Rs 62.20 on Wednesday on the BSE, 5.51 per cent higher than its previous close, while the benchmark Sensex gained 0.47 per cent to close at 17,185.01 points. This investment will allow RMW to cut debt and boost expansion. In the March quarter, RMW posted a net loss of Rs 114.23 crore on a revenue of Rs 95.93 crore.
The company has a market capitalisation of Rs 292 crore. At the end of March 2012, the promoters’ holding stood at 63.15 per cent.
Last year, RMW decided to restructure the company into two business segments by creating subsidiaries for film exhibition and film and media services. The company said such a move would “allow a strategic investor to invest in a business of choice”.
RMW owns multiplex chain BIG Cinemas, which has around 490 screens world wide. As part of the film and media services division, the company provides services in motion picture processing, auto restoration, image enhancement, 3D effects, digital mastering, studio and equipment rental, visual effects, animation and television commercial post production. It is present in India, the US and the UK.
