Balaji Telefilms Surges As Board Approves Restructuring
Street gives thumbs up To Balaji Telefilms’ business restructuring.
Shares of Balaji Telefilms rallied nearly 14 percent – its biggest rise in the last 10 months – after the board approved the merger of two wholly-owned subsidiaries of the company with itself.
Under the scheme of arrangement, the film production business of subsidiary Balaji Motion Pictures Ltd. will be demerged, followed by its merger with Balaji Telefilms. The board also approved the merger of subsidiary Bolt Media Ltd. with itself, according to a regulatory filing on the Bombay Stock Exchange.
The restructuring will help Balaji Telefilms streamline group structure, consolidate business operations and reduce costs, the filing added.
“There were some overlaps between certain operating costs of these subsidiaries and the company which will reduce post the merger,” Sameer Nair, Group CEO of Balaji Telefilms told BloombergQuint in a telephonic interview. The restructuring will require shareholders’ and other regulatory approvals but the company has already started with cost reduction measures, he added.
Balaji Telefilms has no plans to exit its movie production business even though recent releases haven’t done well. Nair said that all three business segments – TV, films and digital – are expected to grow, adding that the core TV business continues to do well.
Nair was optimistic on the launch of the company’s digital content business launch, ALT Digital. Trials are expected to begin in November and the launch is expected in January 2017.