(with inputs from Nikhil Pahwa)
Pyramid Saimira is on a downward spiral, now informing the BSE that the board has decided to sell off stake in the subsidiaries. The group operates in theatre, film and television content production, distribution, hospitality, food and beverage, animation and gaming and cine advertising sectors.
The promoters have already diluted their stake to raise liquidity and announced they might shut down unviable subsidiaries. Last week, the companys board authorized any strategic sale that may be required to effectively re-organise and revitalize the subsidiaries, and also allowed the Managing Director to sell equity shares of the subsidiaries so that fresh working capital may be infused into the companys core activities.
“We have lost close to 100 crore of cash in some divisions and also because of the general recession in the occupancy rates. Therefore, we have lost some 100 crores of cash flow which we thought we should replenish,” P. S. Saminathan, chairman, PSTL, has told Reuters. PSTL is in talks with strategic players for stake sale in two of its foreign subsidiaries and an Indian subsidiary.
Cutting Operational Losses
It plans to bridge its working capital gap of Rs 60 crore by reorganising its production and distribution verticals by this fiscal end. The board also okayed a write down of Rs 76.94 crore in the books of PSTL so that the current books reflect the realisable value of investment.
Outcome of Board Meeting
Apart from authorizing the strategic sale, Pyramid Saimira’s board also approved their management’s plan to file revised Return with the Income Tax Department, and write down the value of investment in the books of PSTL to the extent of US$19.25 million (equivalent to INR 76.94 Crores). More here.
Pyramid Saimira had reported a net loss of Rs 74.74 crore in the quarter ended December 2008. It recorded net sales of Rs 137.94 crore. The company also faces a tax bill of Rs 26.57 crores that has been deferred to March 31st, we had reported in an earlier post.
The company has unleased 194 screens during the third quarter, shifted 151 screens from a fixed hire model to an on demand content supply and another 148 screens to a profit sharing model. After the resignation of non-executive, independent director Nirmal Kotecha in November, another – N Venkataraman – is leaving, the company said in an announcement.