K Sera Sera plans to invest Rs 1200cr over 3 yrs

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K Sera Sera plans to invest Rs 1200cr over 3 yrs

In an interview with CNBC-TV18, Sanjay Gupta, Chief Executive Officer, Kay Sera Sera, spoke about the latest happenings in his company and sector.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » RELATED NEWS Expect to be virtually zero debt by end of Dec: K Sera Sera K Sera Sera Q2 PAT up at Rs 39.72 cr ALSO READ See latest News about K Sera Sera See previous management interviews See what other Experts & Brokerages are saying about K Sera Sera K Sera Sera BSE | NSE 10/02/12 Are Mutual Funds betting on K Sera Sera?

In an interview with CNBC-TV18, Sanjay Gupta, Chief Executive Officer, K Sera Sera Productions , spoke about the latest happenings in his company and sector.

Here is a verbatim transcript of the exclusive interview with Sanjay Gupta on CNBC-TV18. Also watch the accompanying video.

Q: You just issued in January, optionally convertible redeemable bonds (OCRB) that was Rs 24 crore, after they are converted or if they are converted, what is the shareholder stake? Your enabling resolution is for Rs 200 crore, for a company with a market cap of Rs 251 crore, how do you dilute this?

A: We have basically issued the OCRB of the convertible bonds to Global Trade Finance with whom we were enjoying our factoring facility which was a short-term basic working capital facility since Q2 2006. In about 2008, we had a major recession in the media entertainment industry, that is when we restructured our positions into long-term debts and we have issued about Rs 24 crore of OCRBs to Global Trade Finance.

Q: Whenever this is diluted, how much does it address the promoter equity by? Then you have an enabling resolution where you want to raise Rs 200 crore, for a market cap of Rs 251 crore, what does that leave the promoters with?

A: We have a paid up capital of Rs 205 crore currently and so even after conversion of these bonds the dilution of equity of the company towards Global Trade Finance would be very low. In terms of a Rs 200 crore QIP (qualified institutional placement) that we have engaged, we have very ambitious plans for the coming three years; we are looking at a three year window for expansion and diversification of our business right now.

We have plans of almost Rs 1200 crore, in terms of investments, which would go into various ventures and we are on pretty advanced stage of implementation. Therefore, we have come out with fund raising program including Rs 200 crore of QIP and internal accruals of almost Rs 250 crore where we have a bank balance in terms of earlier GDR (Global Depository Receipt) issue of about Rs 150 crore. We have short-term investments, which could be immediately disinvested, of about Rs 100 crore approximately.

Q: You are planning to raise Rs 200 crore of QIP or in addition you also have an approval of 100 million GDR so something other than Rs 200 crore will also be raised?

A: We are looking at raising Rs 100 crore through the GDR/FCCB (Foreign Currency Convertible Bonds) route.

In terms of the investment plan and if I can touch on that briefly and as I have stated earlier we have a plan of setting up 500 mini-plexes which are essentially mini theaters across the country and now these would require an investment at the rate of approximately Rs 50 lakh per theatre which is a total of Rs 250 crore. We also have a technology platform where we are looking in the content, which is the films, into theaters across India, we have targeted 3000 theaters and each theater would involve an expenditure of about Rs 12 lakh which would include software, hardware, the dish and the projectors. So we are looking at Rs 360 crore there.