Standard Chartered Private Equity bought an additional 9.7% stake in Mumbai-based visual entertainment services firm Prime Focus Ltd for Rs 152 crore ($23 million) from Reliance MediaWorks Ltd.
The deal will enable Anil Ambani-led Reliance Group and Prime Focus promoters Naresh and Namit Malhotra to comply with the minimum public holding norms for listed firms. The two partners together owned a 79.8 per cent stake in the firm before Thursday's deal. They will now own about 35 per cent each.
Last year Reliance Group, which took one of its media companies Reliance MediaWorks (RMW) private, merged a part of the firm with the listed Prime Focus to create a global media services powerhouse.
RMW, which was earlier known as Adlabs Films Ltd and was acquired by the Anil Ambani group from Manmohan Shetty a few years ago, moved its global film and media services business into Prime Focus as part of the deal.
RMW and the Malhotras separately infused fresh equity capital into Prime Focus through a preferential allotment.
Early this year, RMW and its associated firms along with the Malhotras had acquired an additional 16.10 per cent stake in the open offer to the shareholders of Prime Focus for Rs 250.3 crore ($40.2 million then).
Although shareholding disclosures still count RMW as a public shareholder, its holding would be classified as part of the promoter group eventually because Reliance Group has become a co-promoter. After the reclassification it would have had to bring down the total stake to 75 per cent, the maximum allowed for promoters in listed firms.
However, the latest deal where RMW has sold some shares to Standard Chartered PE sorts the holding structure.
The PE firm held 12.23 per cent of Prime Focus before the transaction and now owns about 22 per cent. It had originally invested Rs 189 crore in the company through a preferential allotment three years ago.
Shares of Prime Focus closed 4.92 per cent higher at Rs 53.35 on the BSE in a flat Mumbai market on Thursday.
(Source: VC Circle)