Hyderabad-based animation and game art company DQ Entertainment (DQE) has raised around $50 million through issue of senior secured convertible bonds to OL Master Ltd, a private credit fund managed by OCP Asia (Hong Kong) Ltd, as per a stock market disclosure.
In the statement, the company said that will use the proceeds to fund the development of more than 20 owned-IP and co-production projects currently in the pipeline for production over the next two years, to repay debts amounting to $7.21 million, as well as for general working capital purposes.
DQ Entertainment (Mauritius), the promoter and holding company of DQ Entertainment (International) Ltd, executed the documents to raise the fund, the statement showed. The bonds carry a cash coupon rate of 6.5 per cent per annum, payable semi-annually, and will have a maturity period of five years.
“The bonds can be converted into ordinary shares of DQE Mauritius. The conversion of the full $50 million of bonds would currently equate to 56.5 per cent of DQE Mauritius on a fully diluted basis,” it said in the statement.
The bonds can be drawn down in two tranches, the first of which is for $35 million and will be drawn down immediately, while the second tranche of $15 million can be drawn down at the option of the Investor within 12 months thereof, the statement said.
“We are delighted to partner with OCT Asia and confident that this association will help us to realise our vision for DQE. The validation of our business model by the high acumen OCP team strengthens our commitment to produce and distribute world class content across territories and grow our audiences with high quality IP creation,” Tapaas Chakravarti, chairman and CEO of DQ Entertainment PLC, said.
DQE Mauritius owns 75 per cent of DQE (International) Ltd, the main operating company of the group, which is listed on the National Stock Exchange and the Bombay Stock Exchange in India.
DQE is the global entertainment production and distribution company, focused on children’s and family animation content. DQE has a production order book worth over $63 million in terms of revenue to the Group.