Digital Entertainment company Pyramid Saimira Theatre Ltd (PSTL) has proposed to sell stakes in some of its subsidiaries so that fresh working capital can be pumped into the core activities of the firm in India. In a meeting held on Friday, the company board approved its plans of selling equity shares of the subsidiaries.
The decision to sell stakes in the subsidiaries comes at a time when the company has suffered significant losses in its theatre and film business besides suffering losses in its Europe and American joint venture. The firm reportedly has a working capital gap of Rs 60 crore.
PSTL’s website lists 11 companies besides the flagship Pyramid Saimira Theatre Ltd. They include production, content distribution and real estate arms.
The management has also received an in principal approval from the board for its re-organisation plan for the production and distribution verticals. The board has also authorised any strategic sale that may be required to effectively re-organise and revitalise the subsidiaries.
The board has further approved to write-down the value of investment in the books of PSTL to the extent of equivalent to Rs 76.94 crore ($19.25 million) so that, the current books of PSTL reflect the realisable value of investment.
The management had also planned that each company should focus only on the respective business vertical. The board had approved the management’s proposal in this regard and has also said that any cross-business or cross-assets in the respective vertical should be corrected before March 31, 2009.
Besides approving the management’s plan to move towards a uniform, common standards of accounting based on IFRS of all the Group Companies, it has also approved a full-fledged transition plan so that, the Accounts of PSTL can be based upon IFRS from the financial year 2009-10.