MUMBAI – Anil Ambani-led Reliance Mediaworks, boasting of a market capitalisation of Rs. 300 crore, has raised Rs. 605 crore from a foreign private equity fund. The company will use the funds to cut debt and initiate expansion.
The news sent Reliance Mediaworks’ shares to an intraday high of Rs. 66. The scrip finally closed up 5.5% at R62 on the Bombay Stock Exchange. “We have signed a term-sheet agreement to sell a substantial minority stake in the company’s film and media services division,” the company said in a statement without giving details about the foreign investor.
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 necessary approvals, the statement adBusded.
Reliance MediaWorks and the potential investor have agreed to exclusivity for the next three months during which the company will not initiate talks with any other investor.
Reliance Mediaworks has three main businesses including theatre distribution operation under BIG Cinemas, TV production unit under BIG Synergy, and a film and media services segment.
The film and media services business includes motion picture processing, image enhancement and restoration, animation and visual effects, and is attracting business from overseas markets.
The film and the media division remains the flagship and contributes about 60% to the company’s overall revenue.
