Pyramid Saimira to offload 42 % in movie production company

Rohit Mathur - Televisionpoint.com | Mumbai
Chennai-based troubled media and entertainment company Pyramid Saimira Theatre Ltd (PSTL) will offload a stake of 42 per cent in its movie production company to a Kolkata-based corporation. The new partner of PSTL will infuse around Rs 75 crore.

On the offloading to a Kolkata-based company, P S Saminathan, chairman, PSTL, says this corporation would acquire 42 per cent in PSTL's production company. He declined to reveal the corporation's name, which would become a co-promoter and a strategic partner in PSTL.

"The new partner will infuse about Rs 75 crore, which would address the company's immediate liquidity crisis. The money will be utilised to restart production of 17 films, which have been kept on hold due to liquidity crunch." said Saminathan.

The demerger would happen within 90 days after the Securities and Exchange Board of India (SEBI) and the Madras High Court give their approvals. The new company would target a turnover of about Rs 200 crore in the first year of operations.

In addition, as a part of its restructuring plan, PSTL has also decided to demerge its television content production company. The new company would also be listed to raise money, with 25 per cent of the shares being held by the promoters.

PSTL will also demerge its subsidiaries. Its production subsidiary Pyramid Saimira Production International Ltd and its content distribution subsidiary Pyramid Saimira Content Distribution Private Ltd (PSCDPL) are to be demerged and listed by January 2010.

After the demerger, PSTL will not own any shares in the two companies, but the shareholders and promoters of PSTL will own shares in the new subsidiaries. PSTL's credibility issues coupled with the huge loss the company incurred, recession and falling occupancy rates had also prompted the move.

Meanwhile, PSTL is planning to sell its American company, also. There are plans to sell the American exhibition company, Fun Asia, in which the company had invested around $10 million, for $ 5-6 million (around Rs 25-30 crore). One of the prospective buyers of Fun Asia could be Reliance Entertainment, said Saminathan.

Earlier, the company had closed its two subsidiaries, Spice, which was a DTH subsidiary, and Aurona Technologies, a gaming business company. The loss of the two companies alone was around $ 10 million (around Rs 50 crore), which the company decided to write off.

Recently, PSTL has informed the Bombay Stock Exchange (BSE) that its board of directors had considered and approved the raising of up to $ 100 million (around Rs 500 crore) through an international offering of securities.

The capital will be raised through either oreign Currency Convertible Bonds (FCCBs), Global Depositary Receipts (GDRs) and American Depositary Receipts (ADRs), subject to necessary approvals. The company had earlier said it would raise the money through Qualified Institutional Placements (QIPs).