Wednesday October 7, 04:33 AM

Source: Indian Express Finance

Pyramid offloads 40% in production arm

By R Ravichandran
Amid a severe financial crunch coupled with the controversy surrounding SEBI s indictment on its alleged involvement in stock manipulation, Pyramid Saimira Theatre Ltd (PSTL) has identified a strategic partner for its production arm. The company, which has recently undergone a restructuring exercise to help each of its entities stand independently on their own strength, has divested 40% stake in its production arm, Pyramid Saimira Productions International Ltd (PSPIL), to the RDB group, a Kolkata-based diversified group with interests in real estate, cigarettes, retail outlets, financial servicds, power transmission etc. We will continue to look at such strategic partners for our exhibition, distribution and marketing entities, PS Saminathan, managing director, PSTL, said. Talking about valuation, he said, We have not yet valued our production entity. But as a pre-issue valuation, we have decided to divest 40% in the production entity for Rs 40 crore to RDB group. Both the companies will look at listing the entity as and when market revives. According to Saminathan, The move will help in partially meeting our financial requirements while bring in confidence among shareholders and investors alike. The production has been capitalised with Rs 53 crore investments so far, he said. It is significant to note that irrespective of the difficult times and the controversies surrounding it, Pyramid could able to bring in a strategy partner for one of its entities Saminathan said. As per the agreement with RDB group, both the companies will jointly produce 28 feature films and 1,800 hours of television content in the 2010-11 fiscal, with a focus on the four south Indian lanuguages. We will make films only in the south Indian lanugages; the company is producing 17 films which are expected to be released in the next few months, he added. The company has 245 theatres in the southern states of Tamil Nadu, Karnataka, Kerala and Andhra Pradesh compared to 750 a year ago. Till about a year ago these threatres had high footfalls, but things changed dramatically after that. On the upside, we have been witnessing a steady rise in footfalls over the past couple of months or so, he pointed out.