Saregama India Ltd, the entertainment company of the RPG Enterprises, has decided to transfer its television software business to Saregama Films Ltd, a wholly owned subsidiary.
The Saregama India board today approved the transfer of business to Saregama Films which will issue and allot equity shares of Rs 10 each to the parent company. The board has also extended the accounting year till end of June.
Saregama Films Ltd will come into effect from June 30, 2003. It would guide Saregama India to make a fresh entry into the film business from which it pulled out four years ago.
A press statement issued by the company say the rational for transferring the TV software business lies in the fact that it requires different funding.
The opportunities in the software and film business is also different from other activities of the parent company.
Experts find the Saregama move of creating new subsidiary is not in line with the general corporate practice of folding up subsidiaries now.
However, they do not rule out the possibility of the new subsidiary being spun off into a company in the long run.
The company dipped further into the red in the financial year ended March 31, 2003 with incurring a net loss of Rs 38.90 crore as against the previous period
