MUMBAI: The board of GV Films Ltd has approved its scheme of de-merger, wherein the company will be split into three different entities.
At its meeting held today (16 July, 2007), the company discussed the recommendations contained in the report submitted by Deloitte Haskins & Sells (Deloitte) on the demerger of the company and the scheme of demerger.
While GV Films will be the demerged entity, the two resulting companies will be GV Studio City Ltd and GV New Media Technologies Ltd.
The board accepted the share entitlement ratio as recommended by Deloitte Haskins & Sells for the demerger, subject to regulatory approvals. As per the share entitlement ratio, the shareholders of the company will be issued, one fully paid up equity share of Re 1/- each of GV Studio City Ltd and one fully paid up equity share of Re 1/- each of GV New Media Technologies Ltd for every three fully paid-up equity shares of Rs 10/- each held by them in the company.
The assets and liabilities of the entertainment infrastructure division (exhibition) will be transferred to GV Studio City Ltd and that of the web-casting division will be transferred to GV New Media Technologies Ltd. The production, distribution and teleserial business will remain with the parent company – GV Films Ltd.
The Divisions proposed to be segregated would be owned by the same set of share-holders in the same proportion of current holding.. Therefore shareholder wealth remains unchanged. The company’s board had considered a number of aspects like the optimum level of capital requirement given different performance expectations of each of the businesses, the expected absorption of certain impairment of assets arising substantially due to re-alignment with accounting standards, change in business perspective consequent to the proposed segregation of business while finalising the scheme of demerger.
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