Standard Chartered PE to invest $35M in Prime Focus

Mumbai-based visual entertainment services firm Prime Focus is raising $35 million (Rs 189 crore) from Standard Chartered Private Equity through a preferential allotment. Standard Chartered Private Equity (Mauritius) III Ltd will subscribe to the shares of the firm, which would amount to approximately 17.8 per cent stake.

In addition, the company will issue warrants to the promoter Namit Malhotra, representing a right to subscribe to equity shares, for an aggregate amount of Rs 104 crore on preferential basis. The stake of Standard Chartered PE will come down as these warrants get allotted.

Both Standard Chartered PE and Malhotra will subscribe to the shares at Rs 51.71 per unit. The shares of Prime Focus were trading at Rs 52.40 a unit, down 1.13 per cent in a weak Mumbai market on Thursday morning. The company has a market capitalisation of Rs 785 crore at the current share price.

Prime Focus, which counts Rakesh Jhunjhunwala and Ronnie Screwvala’s family office as its shareholders, will convene an extraordinary shareholders’ meeting (EGM) on November 3, 2012, to seek shareholders’ approval for these transactions.

“We are extremely delighted to have SCPE as our long-term partner with this equity infusion. In conjunction, we are in the process of raising long-term debt to support the redemption of the FCCB, due later in the year, and we are in a fairly advanced stage of negotiation with various lenders,” said Ramki Sankaranarayanan, managing director and CEO of Prime Focus.

Prime Focus has $79 million of foreign currency convertible bonds (FCCBs) coming up for redemption in December 2012.

For FY12, the company reported 53.5 per cent jump in consolidated net income to Rs 772 crore with profit after tax rising 30.4 per cent to Rs 99.25 crore, compared to FY11. For Q1 FY13, it reported 12.35 per cent rise in net income to Rs 188.2 crore while net profit fell 18 per cent to Rs 21 crore, compared to the same period last year.

Prime Focus provides creative and technical services to the film, broadcast and advertising market. It provides pre-production to final delivery services like 2D-to-3D conversion, video and audio post-production and digital distribution, among others. The company employs 3,500 people and operates state-of-the-art facilities across North America, the UK and India.

(Edited by Sanghamitra Mandal)

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