Reliance Capital livid over Credit score Suisse stake sale in PE-backed Prime Focus

Reliance Capital furious over Credit Suisse stake sale in PE-backed Prime Focus

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Businessman Anil Ambani-led Reliance Capital Ltd on Monday threatened authorized and regulatory motion in Prime Focus Ltd for promoting stake by Credit score Suisse to the corporate’s promoters.

Credit score Suisse had final week agreed to promote 33.12 per cent stake in Prime Focus to a promoter group, together with Namit Malhotra. Thereafter, the promoters made an open provide to accumulate one other 26% of Prime Focus from public shareholders, as per regulatory norms.

Nevertheless, Reliance Capital mentioned in a press release that the proposed sale was a “gross abuse” of alleged rights by Credit score Suisse beneath sure lending agreements with the Anil Ambani group firm.

It additionally mentioned that the proposed transaction was at a “substantial low cost to the intrinsic worth” of Prime Focus’s shares and violated numerous legal guidelines, guidelines and laws.

In keeping with the annual report for 2018-19 of Reliance MediaWorks Ltd, the group’s media arm, Credit score Suisse had acquired Reliance Capital’s stake in Prime Focus by invoking collateral towards the mortgage. Swiss monetary providers big is promoting its stake to the promoters of Prime Focus for Rs 463 crore.

The promoters made an open provide at Rs 44.15 per share. If the proposal is absolutely accepted, they must spend Rs 363 crore. Shares of Prime Focus closed at Rs 51.80, up 0.78% on Monday within the bullish market of Mumbai.

As soon as closed, the transaction will permit promoters to extend their stake from 35% to nearer to 70%. Presently, the promoter group’s stake within the firm is lower than 35 per cent.

In 2018, VCCircle had reported that the Anil Ambani-led Reliance Group is seeking to exit Prime Focus.

The group, via Reliance MediaWorks Restricted, was the most important shareholder of Prime Focus, barely forward of promoters Naresh and Namit Malhotra.

In 2014, the Reliance Group merged part of its media enterprise with Prime Focus and took a stake within the firm. It later elevated its stake to over 44%, however didn’t develop into a co-promoter of the agency.

After Credit score Suisse took a part of its stake, Reliance Capital now holds about 10.57% of Prime Focus, the most recent shareholding criterion confirmed.

One other vital shareholder in Prime Focus is Commonplace Chartered Non-public Fairness, whose portfolio is now managed by Affirma Capital.

The personal fairness agency had initially invested Rs 189 crore in Prime Focus in 2012 via a preferential allotment. In 2015, the PE agency purchased a further 9.7% stake from Reliance MediaWorks for Rs 152 crore.

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