Prime Focus touched a year high of Rs 58.95, rising nearly 14% intraday on December 29 after Reliance Capital opposed the stake sale by Credit Suisse.
Reliance Capital has alleged that the proposed sale of 33.12% equity shares of Prime Focus by Credit Suisse (CS) at Rs 44.15 per share “is a blatant abuse of the purported rights by the CS under certain lending agreements” with Reliance Anil Dhirubhai Ambani Group.
Credit Suisse admittedly is in control of 33.12% shares of Prime Focus and the offer price of Rs 44.15 per share is not even one-third of the true valuation of Prime Focus shares of Rs 150, it added.
On December 24, Credit Suisse had signed an agreement with the promoter group of Prime Focus to sell its stake in the company at a price of Rs 44.15 per share aggregating to Rs 463 crore. Credit Suisse to sell 10.5 crore shares, or 33.12% shareholding, of Prime Focus to the London-based Malhotra family, the promoter of the company. These shares were previously owned by Anil Ambani’s Reliance Mediaworks Financial Services Pvt Ltd. The shares were pledged to Credit Suisse.
Raising concerns over the proposed sale, the debt-laden Reliance Capital said “The sale is being attempted privately and clandestinely between two foreign entities, without any open, fair and transparent process being conducted to realize the true value of the shares and disregarding basic norms of conflict of interest. The sale price is at a substantial, altogether unwarranted discount to the intrinsic value of PFL’s shares,” it said.
Reliance Capital also added that “The proposed transaction violates several laws, rules and regulations, including inter alia SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, Foreign Exchange Management Act, 1999, and the extant RBI guidelines.”
At 09:43 hrs Prime Focus was quoting at Rs 57.65, up to Rs 5.85, or 11.29% and Reliance Capital at Rs 12.35, down Rs 0.20, or 1.59% on the BSE.