After Nirmal Kotecha, another co-promoter PS Saminathan has diluted stake in Chennai-based entertainment firm Pyramid Saimira Theatre. Saminathan has disclosed that he sold around 6% through 'off market' transactions for close to Rs 6.4 crore during the last ten days of December 2008. As per the disclosure at the end of December his holding was down to 17.98% from 24.45%(on Dec 5). It is not clear if the shares were sold to a holding firm of Saminathan or was sold to some institutional investors.
Earlier Kotecha had said that his holding has come down to 15.48% as of January 2 from 24.89% on September 2008. He had sold 9.4% stake in the company through a mix of inter-se transfer to co-promoter PS Saminathan besides market sales.
The deal followed an agreement between the three co-promoters Saminathan, Kotecha and NC Ravichandran wherein Saminathan was to acquire almost the entire holding of the other two. In October, the cinema chain operator had disclosed that Saminathan plans to buy around 7 million shares, or 24.9% of the company, from co-founders at Rs 200 each, raising Saminathan's holding in the company to 46.9%.
Subsequently in late November the agreement was modified where the transaction was to be struck at the market price of the stock or Rs 200 whichever was less. Since the market price has been hovering much lower around Rs 40-60, the selloff by Kotecha would have happened at the market price.
While Saminathan did buy a part of the shares sold by Kotecha and as of December 5th his stake stood at 24.45% as against 21.9% as of end September, he has now sold shares to undisclosed entities through off market transactions.
Pyramid Saimira was in the news recently where it was the target of a serious fraud wherein the company was sent a forged letter of SEBI asking Saminathan to make an open offer to minority shareholders. The company announced that SEBI had asked Saminathan to make an open offer to acquire 20% of shareholding at a price of Rs 250/share, more than four times the ruling market price. Later it was found that SEBI had not sent any such advisory and the letter was forged. The matter is still under investigation.
Pyramid Saimira which had consolidated net sales of Rs 1,030 crore with net profit of Rs 117.92 for the year ending March 08 now commands a market cap of just Rs 99 crore.