Nazara Technologies' step-down subsidiaries, Kiddopia Inc and Mediawrkz Inc, have transferred $7.25 million (Rs 60 crore) out of a total of $7.75 million cash reserves held at Silicon Valley Bank (SVB) to external bank accounts, the diversified gaming and sports media firm informed stock exchanges on March 15.
"We would like to inform that both the companies i.e. Kiddopia Inc and Mediawrkz Inc have been given unrestricted access to the entire amount of $7.75 million (~Rs 64 crore) that was held at SVB," the company stated in a stock market filing.
The remaining $0.5 million (Rs 4 crore) remains in SVB accounts for unrestricted operational use, it added.
This disclosure comes days after the company had disclosed that Kiddopia Inc and Mediawrkz Inc held a cumulative cash balance of $7.75 million at the crisis-hit bank that suddenly collapsed late last week.
Nazara owns 51.5 percent stake in Paper Boat Apps Private Limited which fully owns Kiddopia and a 33 percent stake in Datawrkz Business Solutions Private Limited which owns Mediawrkz.
Nazara Technologies founder Nitish Mittersain had earlier told Moneycontrol that about half of the cash reserves of these subsidiaries were stuck in the crisis-hit bank, however, since both of them are profitable and generate positive cash flows, there was no "panic situation" or pressure from a business continuity perspective. "Even Nazara does not need to step in to fund these companies," he said.
"This money was lying unused for a long time. But what we were stressed about is that $7-$8 million is a decent sum of money that got stuck and potentially could have gotten lost. So obviously, we were not happy about that situation" Mittersain told Moneycontrol earlier this week.
US regulators had stated on March 12 that all depositors of SVB will be fully protected and will have access to all their money starting March 13.
Nazara Technologies is now exploring various avenues to strengthen its risk management strategy, which includes considering buying insurance on the company's bank deposits, Mittersain told Moneycontrol on March 13.
He also stated plans to further diversify the company's cash reserves to avoid significant exposure to any particular bank.
"At a group level, we have almost Rs 600 crore - Rs 700 crore reserves. We usually do not have more than 10 percent exposure to a particular bank in the overall Nazara group (Nazara Technologies and its subsidiaries). What we will probably do is reduce that to maybe 5 percent threshold for further diversification," Mittersain said.
At 2:57 pm, shares of Nazara Technologies were trading percent 1.1 higher at Rs 504.15 on the BSE.
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