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Reliance MediaWorks Ltd has signed a term sheet (a preliminary non-binding agreement) with an international private-equity fund which will see the latter picking up a less than 50 per cent stake in the company for Rs 605 crore.
The company and the private-equity fund have agreed to exclusivity for the next 90 days. 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 funds obtained from the private-equity player will be used for the film and media services business, which will be spun off as a separate subsidiary.
Reliance MediaWorks started operations in 2005 when the Reliance Group acquired Adlabs, a company which owned a motion picture processing lab in Mumbai and 24 cinema screens located across Maharashtra.
Today, it has three divisions under Film and Media Services, Big Cinemas and Big Synergy.
Earlier this year, the company’s board approved the move to hive off the company’s film and media services businesses into a separate wholly owned subsidiary. The transfer of businesses will be subject to shareholders’ approval.
Big Cinemas, a chain with over 490 screens spread across India, the US, Malaysia and Nepal, caters to over four million customers annually. Besides, the television division, Big Synergy, is a joint venture in which Reliance MediaWorks has a 51 per cent stake, while the balance is held by Mr Siddharth Basu.
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