Reliance Capital Announces Merger Of Its Media Arm With Prime Focus

Anil Ambani-led Reliance Capital, along with the existing promoters of Prime Focus, is investing Rs 240 crore in listed Prime Focus. The company, through its media and entertainment business Reliance Media Works, will end up owning around 30% in Prime Focus.

According to a joint release by both the companies, "Reliance Media Works and the promoters of Prime Focus, Naresh and Namit Malhotra, will each infuse fresh equity capital of Rs 120 crore into Prime Focus at Rs 52 per share, through a preferential allotment, aggregating Rs 240 crore."

The capital raised will be used for the acquisition of the UK's leading film production studio Double Negative. The studio was acquired by Prime Focus last week.

"As part of the transaction, the India and overseas operations of Reliance Media Works' Film and Media Services business will be combined with Prime Focus through a slump sale," the release added. Once the deal is complete, the promoters’ holding will come down to 33.5% from 41% at present.

Reliance Capital will divest its non-core businesses as part of its strategy. The firm wants to focus only on its core financial services business. Sam Ghosh, CEO of Reliance Capital, said, "The proposed transaction reflects a significant step forward in Reliance Capital's strategy of unlocking value from its investments in sectors other than financial services."

This strategy will enable Reliance Capital to focus on businesses of asset management, life and non-life insurance, broking and distribution and related sectors in financial services.

“Similar discussions are underway in relation to unlocking of value from other investments made by Reliance Capital in areas outside financial services,” Sam Ghosh concluded.
(Image: Official site of Reliance Capital)