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Reliance MediaWorks sells 9.7% stake in Prime Focus to StanChart PE
MUMBAI: Reliance Mediaworks (RMW), a Reliance ADA Group company, has sold 9.74 per cent stake in Prime Focus to Standard Chartered Private Equity for Rs 151.3 crore (Rs 1.51 billion).
The deal was done to comply with the market regulator Securities & Exchange Board of India’s (SEBI) rule of minimum 25 per cent public shareholding in a listed company.
RMW had merged its film and media services business with Prime Focus in July last year, making it the world’s largest VFX company. Following the merger, promoters of the two companies held 33.5 per cent (Prime Focus) and 30.2 per cent (RMW) in the merged entity.
The multi-layered deal also included the infusion of Rs 120 crore (Rs 1.20 billion) by RMW in Prime Focus for the stake, while Prime Focus promoters also pumped in the same amount. Finally, after a mandatory open offer, the two promoters acquired additional 16.10 per cent in the merged VFX and media services giant for approximately Rs 250.3 crore (Rs 2.50 billion).
Together, the promoters held 79.8 per cent stake, way more than the SEBI mandated 75 per cent cap. With RMW hiving off 2.91 crore (29.14 million) shares, the promoters, the Malhotras and RMW, held close to 35 per cent each.
The sale of RMW’s shares to Standard Chartered PE was done at the preferential allotment price of Rs 52 apiece. It also bolstered the PE firm’s stake from 12.23 per cent to 21.97 per cent.
In 2012, Standard Chartered PE had invested Rs 189 crore (Rs 1.89 billion) in Prime Focus.