Pentamedia mulls stake sale in subsidiaries

MUMBAI: India's leading animation and special effects software firm

Pentamedia Graphics plans to invite strategic investors to buy stakes in its

subsidiaries, an effort to spark growth and increase value.

Pentamedia, based in the southern Indian city of Chennai, will seek

shareholder approval for the move at its annual general meeting on July 20.

"The company is planning to bring in strategic investors to the various

subsidiaries of the company in order to create better value and growth," a

notice to shareholders said.

Pentamedia said it was in the process of identifying strategic investors in

which to sell stakes in fully owned subsidiaries. It did not identify those

subsidiaries nor say what sized stakes it may sell. Among Pentamedia's Indian

subsidiaries are content companies Mayajaal Entertainment Ltd., Media Dreams

Ltd. and Krish Srikkanth Sports Entertainment, all acquired last year.

Another, Intelvision, was set up last year to tap the broadcasting business

through satellite and the Internet. It has already said it plans to merge the

three content subsidiaries into a new company called Penta Entertainment Ltd.

Its overseas subsidiaries include US-based marketing firm Pentamedia Corporation

and film production company Improvision Corp, and Singapore-based animation

production firm Amimasia International Pvt. Ltd.

Pentamedia last year announced plans to spin off its Internet broadcasting

portal www.numtv.com into a separate entity

and sell a minority stake to strategic investors. But the spin-off of the

portal, which beams channels to around 300,000 registered users, has not

materialized yet. Pentamedia will also seek to renew shareholder approval for a

$250 million issue of securities, including possibly an overseas issue.

Shareholders had approved this resolution last year, but the company did not

proceed with the issue due to poor market conditions.

Pentamedia shares were Rs 5.10 down at Rs 72.25 at the Bombay Stock Exchange

in Tuesday afternoon deals, while the benchmark index was down just over three

per cent.

(C) Reuters Limited 2001.