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Balaji announces restructuring of its entities

Ekta Kapoor, Joint Managing Director, said the revamp will help the company focus more efficiently on content creation capabilities across genres and formats

BestMediaInfo Bureau | Mumbai | September 29, 2016

Balaji_Telefilms_logoBalaji Telefilms Limited (BTL) has decided a major restructuring in its undertakings in its Board Meeting on September 27. The Board of Directors approved amalgamation of Bolt Media Limited (Bolt) and demerger of the film production undertaking of Balaji Motion Pictures Limited (BMPL) with Balaji Telefilms Limited.

The company announced the composite scheme of arrangement and amalgamation -- among BTL, BMPL (a wholly owned subsidiary of BTL), Bolt (a wholly owned subsidiary of BTL) and their respective shareholders and creditors (scheme) -- for the demerger of the business and the business interests of BMPL in the film production undertaking in BTL and the amalgamation of Bolt with BTL.

This scheme is subject to the approval of shareholders of the company, stock exchanges, SEBI, high court and any other regulatory/ statutory authorities as may be required. If approved, it will be effective from April 1, 2016.

The demerger of the film production undertaking of BMPL into BTL will enable the consolidation of the film production business of BMPL with BTL, which is well established and has proven capabilities in content and production. After the demerger, BMPL will focus on film distribution.

Bolt is in a similar line of business as BTL. Its amalgamation with BTL will help in focussed and effective utilisation of the production activities. The implementation of the scheme will not affect the share capital of BTL as both entities are wholly owned subsidiaries of BTL. However, there will be consequential reduction of the share capital of BMPL after the implementation of the plan.

The rationale of the board for approving the scheme is as follows:

Streamlining of group structure: The scheme is expected to enhance efficiencies and combine similar business interests, optimise operational synergies resulting in focused management and efficient administration.

Consolidation of the business operations: The scheme is expected to result in economies of scale, improving allocation of capital, operational efficiency, integration of processes and optimising cash flows, thus contributing to the overall growth prospects of BTL.

Reduction in costs: The scheme is expected to enable pooling of resources of BTL, BMPL and Bolt, resulting in more productive utilisation of resources, cost and operational efficiencies which would be beneficial to all the stakeholders.

Ekta Kapoor Ekta Kapoor

Ekta Kapoor, Joint Managing Director, said, “We are happy to receive approval from the Board of Directors for the scheme of demerger of BMPL and merger of Bolt. This will help us to focus more efficiently on our content creation capabilities across the genres and formats.”

Sameer Nair Sameer Nair

Sameer Nair, Group CEO, said, “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 all our shareholders. This will also ensure more efficient use of the senior management’s bandwidth, thereby allowing more time to focus on ALT Digital, our digital foray that is set to redefine the entertainment viewing experience of Indians in India and across the globe.”

Axis Capital Limited is advisor and Shardul Amarchand Mangaldas & Co, Advocates & Solicitors, is legal advisor to Balaji Telefilms Limited.

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