HONG KONG – Reliance MediaWorks, the beleaguered Indian group which extends from visual effects to multiplex operation, is to delist its shares from the stock market.
The company said on Monday that it will seek a voluntary delisting from the two Indian bourses which trade its shares and will ask shareholder and regulatory approval for the move.
The proposal was put to the company’s board of directors by two other Reliance ADA Group companies Reliance Land and Reliance Capital.
There is little chance that the proposal will not be approved by shareholders as Reliance and its partners hold 73% of the company’ stock.
RMW raised $93 million from shareholders via a rights issue in July last year. But it lost $19.5 million on revenue of $28.8 million in the three months between July and September 2013, the latest period for which financial figures have been published, and $93 million in the 12 months from Oct 2012 to Sept 2013.
Indian media reports have recently suggested that RMW’s Big Cinemas chain is planning an acquisitions spree.
RMW’s publicly traded shares jumped 19%, to INR55.25 on news of the delisting proposal, at which price the company has a market capitalization of $200 million (INR10.67 billion).
In September 2012, RMW acquired 30% of Digital Domain, the struggling visual effects company. Earlier this month Digital Domain Holdings, Digital Domain’s Hong Kong-listed successor company, issued a warning of a “substantial consolidated loss” for the year to Dec. 31, 2013. Digital Domain said that although operating margins had improved post-acquisition, it expects to “realize impairment losses and recognize costs” on the film it backed “Ender’s Game.”