Looks like the Anil Ambani-owned Reliance MediaWorks (RMWL) is already taking precautionary steps at reducing it losses by getting rid of its loss-making cinema exhibition business, and transferring these assets to its subsidiary Reliance MediaVentures.
The company has proposed the transfer of the exhibition business in order for a complete or partial sale of Big Cinemas. The exhibition business of RMWL operates the third largest cinema chains under the brand Big Cinemas, with approximately 250 screens across India. Incidentally, the company is under discussion with various potential investors.
“This transfer also enhances the provision of focused leadership to the exhibition business to pursue value enhancement for shareholders, lenders and employees,” the company said in a statement. Meanwhile, as a measure of achieving greater financial flexibility and to enable the company to enter into appropriate transactions including, in particular, transactions requiring it to receive and/or accept securities of the transferee subsidiary for the transfer of the exhibition business, it is proposed that the board of directors be authorised to invest up to Rs 2,000 crore (Rs 20 billion) in any body corporate by way of grant of loan and/or provide any other form of debt.
Earlier in July, RMWL had combined its global film and media services business, valued at Rs 350 crore (Rs 3.50 billion), with Prime Focus. As part of the deal, RMW and the promoters of Prime Focus were to infuse Rs 120 crore (Rs 1.20 billion) each through a preferential allotment of shares into the merged business. The India and overseas operations of RMWL’s film and media services business was merged with Prime Focus through a slump sale, creating the largest media services group in the world with 5,500 people working across 20 locations.