The Hindu Business Line : GV Films raises Rs 110 cr from global markets

Last week, GV Films Ltd received Rs 110 crore ($25 million) that it raised through a GDR-cum-FCCB issue. The company intends to use the funds for its operations across the entire gamut of the film industry — production, distribution and exhibition, as well as Web-casting of films for a fee.

GV Films' officials have told Business Line that they were able to convince investors about the future of the company, thanks to its performance in the first three quarters, when the net profit was more than the turnover of the previous year. Besides, with the Rs 40-crore-proceeds of a rights issue last year, the company was able to pay off its debt and make two movies.

Box office collections

Mr V. Subramonian, President-Corporate Affairs, GV Films, said that the company's balance-sheet was practically debt-free. Also, box office collections in the last few weeks seemed to suggest that the two movies it produced (one in Telugu and the other in Marathi) would be profitable, he said.

Mr Subramonian believes that even film production could be de-risked by working on a low budget and keeping costs under control. Do that, and less than 35 per cent of the spends is at risk, he says. Two films are under production right now — `Kai Vanda Kalai' and `Thirudi'.

Big opportunity

The rest goes into distribution and exhibition. Distribution, he feels, is a big opportunity. In the film industry, hundreds of movies remain unfinished because of paucity of funds. Mr Subramonian feels that there is an opportunity to collaborate with the producers.But bulk of the funds will go into creation of assets — multiplexes in several cities. "We are looking at some 15 screens in three years," he said.

Goes online

The fourth line of activity is making movies available on the Web. GV Films has a library of around 6,000 films. Mr Subramonian says that the Indian diaspora is a big market for this. The company proposes to levy a monthly subscription rather than a `per view' charge. Even at, say, $5 a month, it will be a sizeable income, he says.

For this purpose, GV Films has tied up with 1Net of Singapore. This company, like Google, has a network of (over 4,000) servers and would stream the movies from G V Films portals to audience around the world. In an announcement in December, the company had said that it expected a turnover of Rs 150 crore and a net profit of Rs 60 crore over the next three years from the Web-casting business.

More Stories on : Overseas Borrowings | Cinema

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page