Eros IPO plans: dilute 15-20%, raise $100 million on LSE

MUMBAI: Eros International Plc, the company that owns, creates and globally distributes Bollywood content, plans to dilute 15-20 per cent in its initial public offering (IPO).

Expressing an intent to float on the London Stock Exchange (LSE) in June, Eros aims to raise $100 million. The company is in the process of filing the prospectus. Evolution Securities is acting as nominated adviser and broker to Eros.

The proceeds of the issue will be utilised mainly for setting up digital cinema exhibition in India, exploitation of content over new media (such as online, cable, wireless and mobile), and expansion of existing businesses.

“Since inception, Eros has enjoyed phenomenal growth and we have a proven track record of organic expansion. We are now at a point in our history where the market is changing rapidly and the business is of sufficient size, reputation and financial strength to exploit the significant opportunities presented to us. As a listed Company we will have the increased financial strength to help us achieve our objectives. We are proud to be bringing the company to the market,” Eros chairman and CEO Kishore Lulla said.

Eros promoter Kishore Lulla was involved in the launch of B4U channels and was chairman of the company for two years. He still owns a small stake in B4U which he founded along with steel major Laxmi Mittal and Kishore Binani. He was responsible for structuring the B4U-Eros deal to launch the UK’s digital satellite and pay TV channel on the BSkyB platform.

Founded in 1977, Eros is the world’s leading distributor of Hindi films. The company has over the last 14 years acquired and distributed an average of 35 films per annum. It has an extensive film library containing in excess of 1,000 titles. Eros has a worldwide distribution network and more than 110 employees based in India, UK, USA, United Arab Emirates, Australia and Fiji.

In the nine months to 31 December 2005, Eros made a profit before tax, interest and goodwill of $12.6 million on turnover of about $32.2 million. “We predict an annual sales of about $44 million at the low end of expectations,” the company said in a release.

Eros’ first major co-production venture, Waqt – A Race Against Time, was the highest grossing Bollywood film in the UK in 2005. The Company intends to progressively increase its production activities.

Eros has also recently launched, an online Bollywood movie and music download service. The company has entered into an arrangement with Intel Corporation to further develop this initiative using Intel ViiV technology that is intended to allow consumers to receive content via their PC to their TV.

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