Eros International will simplify its corporate structure

Mumbai: NYSE-listed Eros International Plc plans to make changes to its current corporate structure, simplifying it and making it more transparent, according to analysts who follow the company. The company has also set up a board of directors to propose possible solutions for simplifying the structure. “The board of directors has appointed a committee to consider potential solutions, which we believe could include delisting or acquiring outstanding shares in the Indian subsidiary,” Jefferies LLC said in its research dated 15 november.

Eros International declined to comment on the development.

This would, however, require joint action with Reliance Industries (RIL) as it would provide investors with greater transparency as well as a simplified operating structure, Jefferies added.

Last February, RIL purchased a 5% stake in Eros pledging to invest up to Rs 1,000 million to produce and acquire Indian films and digital originals in all languages. RIL and Eros have also teamed up to jointly produce and consolidate content from across India.

So far, RIL has Hotstar and Roy Kapur Films on board. Last year, RIL also bought a 24.9% stake in Alt Balaji, a wholly owned subsidiary of Balaji Telefilms, for Rs413 crore. Alt Balaji is a subscription video-on-demand platform.

Eros CEO Jyoti Deshpande has joined RIL’s Media and Entertainment business to grow RIL’s Media and Entertainment initiatives to organically create and grow businesses in Broadcasting, movies, sports, music, digital, games, animation, etc., as well as integrating RIL’s existing businesses. media investments such as Viacom and Balaji Telefilms.

With funding from RIL, Eros hopes to retain the financial flexibility to continue investing in both Eros and the studio. “As for F2019, management plans to invest $75 million in Eros Now and $175 million in the studio, for a total of $250 million in capital expenditures. Over the next three years, Eros plans to invest $750 million in total (covering both originals and roster studios), primarily funded by free cash flow,” Jefferies added.

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