Will continue to hold 20% stake in Method Animation: DQE

Below is the edited transcript of Tapaas Chakravarti’s interview with’s Reema Tendulkar of CNBC-TV18

Q: Could you announce the restructuring that you are undertaking for one your sister concerns Method Animation and what will it mean for the listed entity, DQ Entertainment?

A: Last week we consolidated and we have raised funds for the sister company. On Entertainment is the holding company and the subsidiary company now is Method Animation, Onyx Films and Chapter 2. Method Animation is devoted 100 percent to television, live action and animation shows. Onyx Films is animated feature film and Chapter 2 is live action feature films, mostly French, now English also. So, by consolidating these three entities together, it has become a strong entity now, emerges as stronger one compared to anyone in France in the same domain and recorded revenue of 34 million euro and profit of 5 million euro.

Q: Could you tell us whether this consolidation, restructuring will result in any sort of financial savings for you as well?

A: I wouldn’t say financial saving, but it will be tremendous enhancement to our business because this activity was suggested by our board. We have been suggesting them to do that for a long. They were fragmented companies. We wanted them to be stronger companies and ultimately they did it and the effect is magical and they got the fund infusion very quickly. The second round is expected in another three months time.

We have finalised seven television series. One of them is live action animation hybrid series and two feature films and including the Jungle Book feature film, now goes into co-production with them and their sister company in Canada to take advantage of the Canadian and French subsidy system. So, it is going to benefit DQ’s listed entity tremendously in mid-term, which is one-and-a-half- two years time and long-term. We have emerged as a strong group in whole of Europe in spite of recession in Europe.

Q: You also mentioned something about fund raising, have you all already raised funds for this French company or are you all planning to and would the listed entity DQ Entertainment look to be putting money in its subsidiary?

A: Yes the first round of fund of 10 million euros has come and another 5 million euro is in pipeline. The second tranche for certain targets of corporate governance to be achieved by the group. Very soon announcement will be made for the new CEO of the joint entity . Second round of funding will happen in March-April and so is happening in our group also and we know the tremendous orders in hand, little close to 100 billion Euros plus now substantial rise in order book will happen in next couple of months time. To fund that and to fuel the growth from the mere stable growth for last couple of years and we are on target now also but we want to really breakout and move forward. For that capital infusion will be required so we are working on that.