Reliance Capital livid over Credit score Suisse stake sale in PE-backed Prime Focus

Reliance Capital furious over Credit Suisse stake sale in PE-backed Prime Focus

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Businessman Anil Ambani-led Reliance Capital Ltd on Monday threatened authorized and regulatory motion in Prime Focus Ltd for promoting stake by Credit score Suisse to the corporate’s promoters.

Credit score Suisse had final week agreed to promote 33.12 per cent stake in Prime Focus to a promoter group, together with Namit Malhotra. Thereafter, the promoters made an open supply to accumulate one other 26% of Prime Focus from public shareholders, as per regulatory norms.

Nonetheless, Reliance Capital mentioned in an announcement that the proposed sale was a “gross abuse” of alleged rights by Credit score Suisse beneath sure lending agreements with the Anil Ambani group firm.

It additionally mentioned that the proposed transaction was at a “substantial low cost to the intrinsic worth” of Prime Focus’s shares and violated a lot of legal guidelines, guidelines and rules.

In keeping with the annual report for 2018-19 of Reliance MediaWorks Ltd, the group’s media arm, Credit score Suisse had acquired Reliance Capital’s stake in Prime Focus by invoking collateral towards the mortgage. Swiss monetary providers large is promoting its stake to the promoters of Prime Focus for Rs 463 crore.

The promoters made an open supply at Rs 44.15 per share. If the proposal is absolutely accepted, they should spend Rs 363 crore. Shares of Prime Focus closed at Rs 51.80, up 0.78% on Monday within the bullish market of Mumbai.

As soon as closed, the transaction will enable promoters to extend their stake from 35% to nearer to 70%. Presently, the promoter group’s stake within the firm is lower than 35 per cent.

In 2018, VCCircle had reported that the Anil Ambani-led Reliance Group is trying to exit Prime Focus.

The group, by way of Reliance MediaWorks Restricted, was once the biggest shareholder of Prime Focus, barely forward of promoters Naresh and Namit Malhotra.

In 2014, the Reliance Group merged part of its media enterprise with Prime Focus and took a stake within the firm. It later elevated its stake to over 44%, however didn’t turn out to be a co-promoter of the agency.

After Credit score Suisse took a part of its stake, Reliance Capital now holds about 10.57% of Prime Focus, the newest shareholding criterion confirmed.

One other vital shareholder in Prime Focus is Customary Chartered Personal Fairness, whose portfolio is now managed by Affirma Capital.

The personal fairness agency had initially invested Rs 189 crore in Prime Focus in 2012 by way of a preferential allotment. In 2015, the PE agency purchased a further 9.7% stake from Reliance MediaWorks for Rs 152 crore.

Keynote is the supervisor of the Company Companies open supply.

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