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Speaking to indiantelevision.com, TE promoters T Suresh Chandra
Menon and Revathy disclosed that the legal formalities for the proposed
merger between TE and In House will happen after five to six months.
They confirmed that the move is in the best interest of the shareholders.
The promoters stake will be around 7 per cent post merger, says
Menon.
TE will look after the creative aspects whereas InHouse Productions
team will have the management responsibilities. "In House has
produced several serials on Zee, Sony and Eenadu. They will provide
us with the requisite expertise in marketing our content,"
adds TE MD Suresh Menon.
However, the TE scrip is languishing at an abysmal Rs 2.75 on the
Bombay Stock Exchange (BSE). On 3 January 2003, TE informed the
BSE that a meeting of the board of directors met to consider and
approve, inter alia, modifications in the swap ratio.
On 12 December 2002, TE had informed the BSE that it was to convene
a board meeting shortly to take on record the scheme of arrangement
and has revised the swap ratio for the said merger as follows:
* For every five (Rs 10 paid up) equity shares in In House, four
(Rs 10 paid up) redeemable preference shares in TE.
* For every 20 (Rs 10 paid up) equity shares in In House, 11 (Rs
10 paid up) redeemable debentures in TE.
* For every 25 (Rs 10 paid up) equity shares in In House, 17 (Rs
10 paid up) new equity shares in TE.
Earlier, TE informed BSE that the board of directors at their
meeting held on 18 November 2002 agreed upon the valuation report,
as presented by chartered accountants NM Raiji & Co. The company
had drawn up a restructuring programme and as part of this plan
and it was contemplating to reduce its share capital by 85 per cent.
As a part of the same restructuring plan, it was proposed to issue
new shares in the same proportion of 15 per cent of the existing
shareholding. Thus the existing shareholders of TE would receive
15 equity shares for every 100 equity shares held in the company.
TE MD Menon adds: "We realised that our core competencies
were on the creative side. We didn't have time to look into the
business aspects. I suppose, the marketing of Mitr- My Friend
suffered due to the same reasons." Incidentally, Mitr-My
Friend was released in the US and South Africa in 10 theatres
located in areas where expatriate Indians lived."
"However, our communications positioning for the movie was
wrong and on hindsight we should have released the film in mainstream
US theatres outside Indian localities," adds Suresh. Mitr
will be shown on Zee as part of the Thursday Premiere Valentine
Day offering.
The initial public offering (IPO) of TE was made in 2000 after
the promoters took over the operations of Telephoto Films, a proprietary
firm owned by them at a cost of Rs 22.5 million paid in cash using
private placement proceeds. The firms engaged in the same line of
business have since ceased operations. The face value of each share
was Rs 10 at that time.
TE also raised Rs 52.5 million through a private placement to venture
capital firms and private equity investors at Rs 20 per share. The
company proposed to set up a special effects and animation studio
at Rs 31.5 million. However, TE officials state that they haven't
yet firmed up the animation plans. TE has a library with 600 hours
of original software.
Some of the better known serials produced by the firm are Chinna
Chinna Aasai, Nirangal, Revathy ,Doctors., Nirangal and
Boom Boom Shakalaka.
When queried about the existing opportunities in South Indian channels,
Suresh says: "There are several production houses in the South
such as Radaan and Cinetimes which are doing well. In fact Cinetimes'
Metti Oli is number one and is doing better than the others."
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