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Prime Focus Group has sold its 30 per cent stake in Digital Domain-Reliance, LLC (DD-Reliance) to the existing holder of the remaining 70 per cent stake in DD-Reliance, which is ultimately wholly-owned by Digital Domain Holdings Ltd (DDHL).
DDHL is headquartered in Hong Kong, and its shares are listed on the Main Board of The Stock Exchange of Hong Kong Ltd (HKEx Stock Code: 547).
The parties have also signed a MoU regarding the proposed formation of a 50:50 joint venture with DDHL to carry on virtual reality and advertising businesses in India.
The total consideration payable to the Prime Focus Group for the 30 per cent stake sale and the possible formation of a joint venture is $55 million worth of shares in the Hong Kong-listed DDHL based on an issue price of HK$0.596 per share.
The above transactions are subject to, inter alia, due diligence and customary regulatory and other stakeholder approvals.
The consideration for the 30 per cent stake sale (through an international wholly owned subsidiary of Prime Focus) is $30 million. As part of the possible joint venture transaction worth $25 million, the Prime Focus Group will, inter alia, infuse $5 million into the new joint venture.
Proceeds from the sale, as and when they are monetised, are expected to be partly used for the expansion of its advertising business, to catalyse the growth of Virtual Reality in India and also to pare down debt.
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