Anil Dhirubhai AmbaniEnterprises has bought an $80.2m controlling stake

in India's largest filmcompany Adlabs through subsidary company

Reliance Capital.

The publicly-listed Adlabsis a leading player in film production,

post-production,distribution and exhibition with several multiplexes

and 52 digital exhibitioncinemas.

The deal is one of thebiggest in Indian entertainment history.

Adlabs also owns productioncompany Entertainment One (India) Ltd, with

three films currently inproduction, a stake in post-production house

Prime Focus Ltd, alongsideprocessing facilities. Adlabs' turnover was

reported at $25 million in2004, returning net profits of $5.5m.

The deal was struck throughReliance buying out Adlabs co-founder

Vasanji A Mamania's 27percent stake in the company for $25m.

In addition a $55mpreferential share issue will be made to Reliance,

taking its total stake to51%.

Adlabs' other co-founder,chairman and managing director Manmohan Shetty

- also a 27% shareholder -will see his stake diluted to 16% once the

share issue is made. Shetty,who will remain at the company, said:

"Investment by Reliancewill provide [Adlabs] with a strong platform to

attain leadership across theentire value chain."

Shetty is a veteran of thefilm industry, producing Ardh Satya, which

received a Best FilmFilmfare Award in 1984.

Anil Dhirubhai AmbaniEnterprises is headed by Anil Ambani. He recently

parted ways with hisbrother, Mukesh. Together they owned Reliance

Group, founded by their latefather, Dhirubhai Ambani. The brothers were

listed as the world's 60thrichest people in this year's Forbes wealth

rankings. Anil Ambani tookover Reliance Capital as part of a deal

struck with his olderbrother in dividing up the $23 billion Reliance

Group.

In other developments, AnilAmbani's group today approached the Indian government for a licence to enterthe competitive direct-to-home (DTH)

broadcasting servicesbusiness. Currently there are only four DTH

service licence holders:Prasar Bharti, Zee TV, Sun TV and the Murdoch

Tata joint venture, SpaceTV. Prasar Bharti and Zee have already

launched their services.

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