Eros International reiterates positive biz fundamentals, strong financial position
MUMBAI: Film production and distribution company Eros International Plc has reiterated its positive business fundamentals and strong financial position after its stock plunged nearly 20% on Friday.
Eros International Plc has announced a $20 million share repurchase programme. It has also announced that Eros Now has 18.8 million paid subscribers as of 31st March 2019.
“We are very excited to announce that our Eros Now platform has risen to 18.8 million paid subscribers and 154.7 million registered users as of March 31, 2019, far exceeding our target for the full fiscal year 2019 of 16 million subscribers. This represents a 138% increase in paid subscribers over the past 12 months and an 18% increase over the prior quarter,” Eros International Group Chairman and CEO Kishore Lulla.
“Our success in building our subscriber base will further increase the visibility of our earnings and move the company towards a more annuity-based business model which will deliver continuing and profitable growth.”
On the ratings downgrade by CARE Ratings, Lulla commented, “Additionally, I am pleased to inform shareholders that we now have a strong financial and operating position and our management team are making it a priority to work with CARE Ratings, the regulatory agency, to have our credit rating revised upwards in due course.”
A US-based forensic financial research firm Hindenburg Research in a report alleged potential wrongdoing at parent Eros International Plc.
The research firm stated that much of the receivables that the company had claimed might not be existing, and accused its promoters of engaging in “highly irregular relatedparty transactions” which “appear designed to hide receivables”.
“I would also note that baseless allegations have been made against the company in the past and subsequent frivolous lawsuits have been dismissed with prejudice by the US courts. Similar baseless allegations continue to be made by known short sellers without justification. We will continue to defend our interests rigorously at all times,” said Lulla about the Hindenburg report.
Eros International Plc Group Financial Officer and President of North America Prem Parameswaran added, “Eros has a strong liquidity profile and healthy balance sheet with no meaningful near-term debt maturities. As of March 31st, 2019, we had over $135 million of cash and cash equivalents1 on our balance sheet and our net debt position was $145 million (unaudited figures).
“Since the company went public in 2013 Eros has invested over $1.2 billion in content and generated over $970 million in operating cash flow from operations. As a result of this sustained and prudent investment, Eros has one of the largest libraries of Indian films in the world including over 12,000 digital rights.
“The Eros Board of Directors believes the equity value of Eros International PLC is seriously undervalued in the public markets and accordingly, the Board has approved a share buyback program of up to $20 million of outstanding common shares.
“We look forward to discussing Eros International’s Fiscal Year and 2019 results with the market on July 15, 2019.”
The company said that the share repurchases may be made at management’s discretion from time to time on the open market or through privately negotiated transactions. The repurchase program has no time limit and may be suspended for periods or discontinued at any time. Eros’ share repurchase program does not obligate it to repurchase any specific number of shares and may be suspended or discontinued at any time.