Balaji Telefilms to restructure its motion picture business

MUMBAI: It’s restructuring time at Balaji Telefilms Ltd (BTL). The company has informed the Bombay Stock Exchange that it has got the board approval to rejig some of the businesses its subsidiary companies Balaji Motion Pictures Ltd (BMPL) and Bolt Media Ltd (BML).

BMPL does both, film production and distribution. The film production part of BMPL is being carved out and demerged with BTL, with the former being left with film distribution on its plate on which it will focus. Additionally, BTL is also being merged into BTL. BML was set up help BTL have a presence in non-fiction, reality and digital content a few years ago.

BMPL reported a revenue of Rs 22.82 crore and it had a negative net worth of Rs 47.58 crore in the year to 31 March 2016. In the past year, the company produced films such as Udta Punjab, Kya Kool Hain Hum 3, Azhar, Great Grand Mastii, and A Flying Jatt. The films that are slated to be released under its banner over the next year include: the Kamal Hassan-directed Vishwaroopam II, the Ken Ghosh-directed XXX, the Mohit Suri-directed Half Girlfriend, and the Sashanka Ghosh directed Veera Di Wedding.

BMPL had once been placed among the top five film production companies in India. BML had revenues of Rs 65 lakh in the same period with its net worth getting wiped out to the tune of Rs 1.74 crore.

The entire transaction – not involving any cash flow – will not impact BTL’s share capital. However, BMPL’s equity will see a reduction. Axis Capital is advising to BTL with Shardul Amarchand Mangaldas acting as the legal advisor.

BTL says it is resorting to this so as help streamline the group’s structure as BTL is also into production. The amalgamation and demerger will result in economies of scale, improve capital allocation, cost and operational efficiency, cash flows, and utilization of resources.

Says BTL joint managing director Ekta Kapoor: “This will help us to focus more efficiently on our content genres and formats.” Adds BTL group CEO Sameer Nair: “We are committed to improving margins and profitability and consolidation of our operations is a step in that direction leading to a better value creation for our shareholders. This will also ensure more efficient use of our senior management’s bandwidth, thereby allowing more time to focus on ALT Digital, our digital foray, which is set to redefine the entertainment viewing experience of Indians in India and across the globe.”

The restructuring proposal, however, awaits shareholder and other legal approvals.

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