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 andexhibition with several multiplexes and 52 digital exhibition cinemas.
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 in 2004,returning net profits of $5.5m.
The deal was struck throughReliance buying out Adlabs co-founder Vasanji A Mamania's 27 percent stake inthe 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 - willsee his stake diluted to 16% once the share issue is made. Shetty, who willremain at the company, said: "Investment by Reliance will provide [Adlabs]with a strong platform to attain leadership across the entire valuechain."
Shetty is a veteran of thefilm industry, producing Ardh Satya, which received a Best Film FilmfareAward in 1984.
Anil Dhirubhai AmbaniEnterprises is headed by Anil Ambani. He recently parted ways with his brother,Mukesh. Together they owned Reliance Group, founded by their late father,Dhirubhai Ambani. The brothers were listed as the world's 60th richest peoplein this year's Forbes wealth rankings. Anil Ambani took over RelianceCapital as part of a deal struck with his older brother in dividing up the $23billion Reliance Group.
In other developments, AnilAmbani's group today approached the Indian government for a licence to enterthe competitive direct-to-home (DTH) broadcasting services business. Currentlythere are only four DTH service licence holders: Prasar Bharti, Zee TV, Sun TVand the Murdoch Tata joint venture, Space TV. Prasar Bharti and Zee havealready launched their services.