Nishant Fadia, CFO, Prime Focus, says that the company has raised USD 70 million to make FCCB payments which is due tomorrow.
We have always maintained that we are not really a Q-o-Q business
Nishant Fadia, CFO, Prime Focus , says that the company has raised USD 70 million to make FCCB payments which is due tomorrow.
Below is the edited transcript of his interview to CNBC-TV18.
Q: How much amount has the company and will have to pay back? What will be the difference in interest costs from this loan rolling?
A: We had a USD 55 million notional Foreign Currency Convertible Bond (FCCB) which is to be repaid at the value of USD 79 million with the accreted interest. We have raised this money through Standard Chartered. They have invested USD 70 million, USD 35 million as direct equity and USD 35 million as Non-Convertible Debentures (NCD). There is rolling of the NCD, the difference of Yield to Maturity (YTM) on the convertible bond was about 7.5 percent while the NCD which is in rupee is at 13.5 percent.
Q: In Q2 your margins dipped about 18 percent on the delay in your 2D and 3D conversion projects, is that improving? Do you expect Q3 to be better?
A: We have always maintained that we are not really a Q-o-Q business, so there tends to be some variation between quarters, but on an annual basis we are confident that these projects will get executed and we will see the margins to similar levels what we saw earlier.
Q: Does this end your interest rate issues altogether? What will be your average annual interest outgo?
A: On the group level, the annual rate of interest will be between 9-10 percent and the outgo will be between USD 10-11 million at a group level.
Q: How does growth looks in terms of top-line and margins?
A: Internally, our business has two parts, the creative services business which is 2D-3D conversion business and the visual effects business which is driven out of the Hollywood market. Our technology business is doing well, where we did Rs 33 crore business last year. In the first six months we have done a business of Rs 35 crore with a visibility of Rs 90-95 crore. In this business there is string and continuous growth and the traction is strong. We are working on some marquee projects like Star Wars. We just delivered Men in Black and Frankenweenie for that market.
Q: What will be interest outgo numbers for the group?
A: It will be about USD 10 million across the group.
Q: That is a step-up from what you are doing now?
A: It is because the NCD interest will get added on, because the FCCB interest was being passed through the reserves.
Prime Focus stock price
On November 21, 2014, Prime Focus closed at Rs 48.90, up Rs 0.05, or 0.10 percent. The 52-week high of the share was Rs 58.35 and the 52-week low was Rs 23.75.
The company's trailing 12-month (TTM) EPS was at Rs 2.15 per share as per the quarter ended September 2014. The stock's price-to-earnings (P/E) ratio was 22.74. The latest book value of the company is Rs 25.55 per share. At current value, the price-to-book value of the company is 1.91.
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