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Stock Report
GV Films to demerge company into 3 separate entities
Posted On : 2007-07-16 23:29:30( TIMEZONE : IST )
GV Films Ltd has announced that the Board of Directors of the Company at its meeting held on July 16, 2007 has discussed the recommendations contained in the report submitted by M/s. Deloitte Haskins & Sells (Deloitte) on the demerger of the Company and the Scheme of Demerger.
The Board accepted the recommendations contained in the report of M/s. Deloitte and had adopted the Scheme of Demerger whereby the Company will be demerged into three separate entities. The Company will be the demerged entity and the two resulting Companies will be GV Studio City Ltd and GV New Media Technologies Ltd. The appointed date for De-merger is July 01, 2007.
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, 1 (one) fully paid up equity share of Re 1/- each of G V Studio City Ltd and 1 (one) fully paid up equity share of Re 1/- each of G V New Media Technologies Ltd for every 3 (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 the new entity 'GV Studio City Ltd' and that of the web-casting division will be transferred to the new entity 'GV New Media Technologies Ltd'. The production, distribution and teleserial business shall remain with the parent Company, i.e. G V 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 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.
