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Anil Ambani exits cine exhibition biz
MUMBAI: Anil Ambani has finally found a way to exit the cinema exhibition space: His loss-making film and entertainment company Reliance MediaWorks Ltd (RMWL) has signed a definitive agreement with Carnival Films, which is backed by a Kochi-based trading company, to hive off the multiplex business for about Rs 700 crore (Rs 7 billion).
The deal includes debt, part funding from internal accruals and promoter funding.
RMWL, which also operates in film and media services & television content production apart from film exhibition, had delisted from the bourses on 6 May 2014.
RMWL’s net worth is fully eroded. It has a negative net worth of Rs 6,681.44 million (Rs 668.14 crore). It has incurred a net loss of Rs 10.94 billion (Rs 1,094.21 crore) for the 18-month period ended 31 March 2014.
It had a total income of Rs 7,599.64 million (Rs 759.96 crore), while negative balance carried to the balance sheet was Rs 21.83 billion (Rs 2,182.72 crore).
Incidentally, total revenue from film exhibition business for the 18 months ended 31 March 2014 was Rs Rs 594.692 crore (Rs 5.95 billion).
During the 18-month period, Big Cinemas served 43 million customers and had an average ticket price of Rs 141 and average spent per head of Rs 34.
The move is part of a strategy to exit the loss-making non-core businesses. Earlier in July, RMWL had merged its global film and media business with Prime Focus, wherein both partners infused Rs 1.20 billion (Rs 120 crore), each through preferential allotment of shares into the combined entity.
In July 2005, marking its entry in the media and entertainment space, Reliance Capital had picked up 51 per cent stake in Adlabs Films for about Rs 360 crore (Rs 3.6 billion) from Manmohan Shetty and Vasanji Mamania.
Mamania exited the company and Shetty exited from the venture one year later, making way for Anil Ambani to go for rapid expansion.
While Reliance Land Pvt Ltd owned 72.81 per cent, Reliance Capital held the remaining 18.76 per cent in RMWL.