Anil Dhirubhai AmbaniEnterprises has bought an $80.2m controlling stake
in India's largest filmcompany Adlabs through subsidary company
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
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.