Mumbai: Reliance Mediaworks , controlled by billionaire Anil Ambani, plans to launch a previously announced rights issue by around March to raise Rs500 crore ($93 million) to help reduce debt, chief executive Anil Arjun said in an interview.
The film and entertainment services company, which has a debt of Rs1500 crore, is also in talks with global private equity firms and other investors to raise Rs400-500 crore.
“The idea of these fund raising exercises is to deleverage,” Arjun said on Wednesday. “We should be able to launch the rights issue in the next 2-3 months, say around March.”
File photo of Anil Ambani
The company, with a market capitalisation of about $70 million, hopes the two fundraising exercises will cut its debt equity ratio by a third to 1.2 to 1 by next year, Arjun said.
Reliance Mediaworks has three main businesses: a theatre distribution operation under BIG Cinemas, a TV production unit under BIG Synergy, and a film and media services segment.
Under an ongoing restructuring, the company hopes to attract investors by allowing them to participate in specific businesses, rather than at the holding company level.
The company expects its revenue to grow 20% to about Rs 1000 crore in the fiscal year ending March and hopes to turn profitable at the net level in 2012/13, Arjun said.
It had reported a consolidated loss of Rs329 crore on net sales of Rs781 billion crore in the previous fiscal year.
Reliance Mediaworks has been looking to expand its business through alliances in the domestic and international markets.
The company’s film and media business, which includes motion picture processing, image enhancement and restoration, animation and visual effects, has state-of-the-art facilities that are increasingly attracting business from overseas.
The company expects this division to contribute 60% to overall revenue in 2012/13, up from 40% now, driven by demand for content from customers outside India.
It expects overall orderbook for the film media service business to more than double to Rs200 crore in 2012/13.
Reliance Mediaworks is also looking to expand its presence in North America, Europe and the UK.
“We are looking at opportunities in the media services space for content management, content processing out of Belgium and Germany. It will be via tie-ups, which is expected to happen in the next fiscal year,” Arjun said. He did not provide details.
Earlier, this year the company tied up with US company Digital Domain in an effort to win big-ticket visual effects and 3D conversion projects.
In 2012/13, the company expects to be involved in three or four projects under the tie-up, each worth $50-$100 million, Arjun added.
The company also recently tied up with Vensat, a Chennai-based firm to expand its visual effects, graphics and animation capabilities to southern markets in India.
“We see a great deal of demand coming from the southern Indian markets and we plan to build our presence there,” Arjun said.
The company does expect a slowdown in its cinema distribution business, however. It plans to add 30 to 40 screens in 2012/13, down from 60-70 in the current fiscal year as commercial property projects get delayed.
Reliance MediaWorks, currently has about 550 screens spread across India, United States, Malaysia and the Netherlands.
In early afternoon trading, the company’s shares were down 5.92% at Rs75.50 . They have plunged more than 66% since the start of 2011 compared with a near 23% fall in the benchmark index.