Pyramid Saimira to raise Rs 844 million via IPO, sets price band at Rs 88-100

MUMBAI: Chennai-based cinema chain Pyramid Saimira plans to raise Rs 844.4 million through a public float to part-finance its expansion plans. This includes refurbishing theatres after taking them on long term lease and installing digital systems of delivery.

The issue, which opens on 11 December and closes on 18 December, will have a price band of Rs 88 to Rs 100 per equity share of Rs 10 each. The initial public offering (IPO) will be entirely through the book building process.The total fund requirement is estimated at Rs 1.11 billion. The funding will be met through pre-issue capital and internal accruals of Rs 267.5 million, in addition to the IPO.

For refurbishing the theatres, the company plans to invest Rs 368 million while digitalisation process will absorb Rs 241.4 million. The other big investment of Rs 203.4 million will be towards recoverable security deposit with theatres and multiplexes.

The company plans to tie up with 120 theatres in A locations and 235 threatres in B and C locations by March 2007. The average length of the lease varies from five to 15 years with the option to extend it.

Pyramid Saimira has tied up with Delta Electronics, Taiwan, for digital projectors, Real Image Media for video servers and Tatanet for the utilisation of their broadband VSAT infrastructure. Arasor Inc, USA, will provide for next generation laser projection technology, Valuable Media for end-to-end digital cinema solution on pay-per-use basis in 1000 Pyramid theatrical locations and Prasad Labs for digital conversion.

With focus on tier II cities, Pyramid plans to have a pan India presence. "We are currently present in the southern states. But we are soon spreading out to Punjab, Haryana and Rajasthan," says Pyramid Saimira Theatre managing director PS Saminathan. The company has tied up with Spirit Global Constructions which shall construct 60 propoerties in Punjab while Swatantra Land & Finance shall offer 22 properties at Haryana and 20 properties at Rajasthan.

"We plan to have over 2000 screens in 1550 locations across India with 58.75 million sq. ft. under operational management by 2010," says Saminathan. The company currently has 148 screens operational with over 1.8 million sq. ft.

The company is close to signing a deal with Chinese government to run 7,000 theatres on the mainland. Bennett Coleman and Company Ltd (BCCL), publishers of The Times of India and The Economic Times, has bought a small stake in the company.

Among the promoters of Pyramid Saimira include noted Tamil film producer V Natarajan and Saminathan who owned a cable TV network in parts of Tamil Nadu.

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