Pyramid Saimira to invest Rs 4 bn in China JV

Cinema chain operator Pyramid Saimira Ltd plans to invest close to 4 billion rupees in the current fiscal year in its joint venture with the China Society Music Research Board.

The Indian firm had signed a preliminary agreement with the Chinese entity, which is under the Ministry of Culture of the People's Republic of China, to form Jiangsu Pyramid Longzhe Group.

The joint venture will operate theatres, distribute films and engage in other entertainment, arts and cultural activities in China, it said in a statement. It would also launch one screen a day in Mainland China and generate non-box office revenues too.

Carlyle, Citi eye 15% in Pyramid Saimira

Private equity majors Carlyle Group and Citigroup Venture Capital International (CVCI) are in the race to acquire a 15 per cent equity stake in Pyramid Saimira Theatre, a Chennai-based theatre chain company.

Pyramid Saimira Theatre is offloading a 15 per cent stake to the private equity investors at around Rs 420 to Rs 445 a share, which is nearly 31.6 per cent premium to the current market price of Rs 338.Sources said two more investors were also in talks with the company for the stake.

In addition to the 15 per cent stake in the listed entity, the group was also likely to sell around 15-20 per cent stake in its unlisted production company, Pyramid Saimira Production.

Read more in The Business Standard article.

Citigroup VC favourite for Pyramid Saimira stake

Private equity major Citigroup Venture Capital (CVC) has emerged as the front-runner for acquiring stake in Pyramid Saimira Theatres (PSTL) and its subsidiary Pyramid Saimira Productions (PSPL) for around $100 million (around Rs 400 crore). The companies are expected to make an announcement by month-end.

Other global financial majors like Caryle Capital, ABN Amro and Grant Thornton are also in talks to acquire a 14.9% stake in PSTL and 26% in PSPL.

According to sources close to the development, a 45-day due diligence by CVC is in its final stages, on completion of which the companies are expected to announce the deal.

When contacted, PSTL director Nirmal Kotecha admitted that that the group was in talks with five-six private equity majors for offloading stake.PSTL was looking at raising funds of around $150-200 million for its acquisition and expansion plans.

Read more in The Business Standard article.

Pyramid Saimira raises $90 mn via FCCB route

Pyramid Saimira Theatre Ltd on Wednesday said it has raised $90 million (Rs 369 crore) through issue of Foreign Currency Convertible Bonds (FCCBs) in the international market to fund its overseas acquisition plans.

"The proceeds of the issue shall be used for potential strategic acquisitions outside India and other purposes", the company said in a communique to the Bombay Stock Exchange (BSE).

The FCCBs would have matured on June 4, 2012 and would be convertible into equity shares of the company at Rs 454 per share, which is a premium of 36 per cent, calculated over the closing price on June 28 at Rs 333.20 on BSE.

The FCCBs would be listed on the Singapore Stock Exchange and the underlying equity shares upon conversion would be listed on the BSE and the National Stock Exchange (NSE).

Read more in The Economic Times article.

Small IPOs to face price band on listing

The Securities and Exchange Board of India (Sebi) proposes to ask the stock exchanges to put circuit filters on the first day of listing of those companies with issue sizes up to Rs 200 crore. A formal communication to this effect is expected shortly.

After the first day of listing, the exchanges put a price band of 20 per cent for the movement of the stock prices. However, the level of circuit filter proposed for IPOs on the first day of listing is not known.

The decision follows the recent Sebi investigation into the huge surge in equity prices of six companies on listing day. The market regulator has also observed that certain entities placed abnormally large share orders at prices far below the prevailing market rates on the opening day.

The market regulator concluded that the intention of placing such orders was not for genuine trading but only for artificial enhancement of demand, a manipulative practice. The securities under the regulator’s scan now are Mindtree, Shree Asthavinayak, Pyramid Saimira, Pochiraju, Cambridge and Al Champdany.

Abnormal price rallies have also been observed when shares are relisted. Several companies that delisted from regional exchanges to list on the national exchanges have seen a 900-1,000 per cent increase in their shares on listing day.For example, Delhi-based Ahluwalia Constructions saw a 1,000 per cent rise in its scrip prices when it relisted on the Bombay Stock Exchange on February 22 this year.