ADAG's Adlabs Films gets nod for restructuring
03 June 2009
As the Anil Ambani-promoted Adlabs Films Ltd re-crafts its various business verticals, the company said yesterday that the government has approved the transfer of its radio business to Reliance Unicom.
''The ministry of information and broadcasting has given its no-objection to the transfer of operation of the FM radio licence to Reliance Unicom pursuant to the scheme of arrangement for the demerger of radio business of Adlabs Films'', the company said in a filing to the Bombay Stock Exchange.
Last year, the board had approved the scheme of demerger under which shareholders of Reliance Unicom would be issued one share for each share held in Adlabs Films. The demerger would be effective from 1 April 2008, the company had said.
Earlier in April, the Bombay High Court had approved the scheme of arrangement between the companies, the filing said.
The Rs 800-crore company has decided to demerge its radio business under the new entity Reliance Unicom, and freeze all film production activities. The move, according to industry experts, is expected to provide sustainable revenue and improve profitability.
Operating under the banner of BIG 92.7 FM, the company's radio station is currently operational in 44 cities. The radio business contributed Rs141.61 crore (20 per cent) to Adlabs' topline in first nine months of fiscal 2008-09. However, since the business has been in investment mode, it suffered losses of Rs34.74 crore in the period.
Adlabs is focussing on expanding its film exhibition business locally as well as globally. It expects to add around 123 screens and 49 screens in FY10 and FY11 respectively, from the current 473 screens.
Adlabs is also coming up with a new state-of-the-art studio facility at Film City in Mumbai.