Mumbai, April 27, 2016: 

Prime Focus Group announced the sale of its 30% stake in Digital Domain-Reliance, LLC (“DD-Reliance”) to the existing holder of the remaining 70% stake in DD-Reliance, which is ultimately wholly-owned by Digital Domain Holdings Limited (“DDHL”), that is headquartered in Hong Kong, and whose shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited (HKEx Stock Code: 547). The parties have also signed a MOU regarding the proposed formation of a 50:50 JV with DDHL to carry on Virtual Reality and Advertising businesses in India. The total consideration payable to the Prime Focus Group for the 30% stake sale and possible formation of JV is US$55 million worth of shares in the Hong Kong listed DDHL based on an issue price of HK$0.596 per share. The above transactions are subject to, inter alia, due diligence and customary regulatory and other stakeholder approvals. 

The consideration for the 30% stake sale (through an international wholly owned subsidiary of Prime Focus) is US$30 million. As part of the possible JV transaction worth US$25 million, Prime Focus Group will, inter alia, infuse US$5 million into the new JV. 

The proceeds from the sale, as and when they are monetized, are expected to be partly used for expansion of its Advertising business, to catalyze the growth of Virtual Reality in India and also to pare down debt. 

Commenting on the transactions, Mr. Namit Malhotra, Founder, Executive Chairman and Global CEO, Prime Focus Ltd, said: “We are very excited about working with the DDHL team on the possible new JV and grow the domestic advertising, virtual reality and related business opportunity. Advertising has always been a core focus area for the Company and this possible new JV will help us further enhance our credentials and penetrate the market.

“Virtual Reality (VR) is at the cusp of exponential growth across the globe, with its plethora of applications. The global VR technology market is estimated to reach US$16 billion by 2020 (source: marketsandmarkets.com) and India with its massive smartphone base is expected to play a key role in its adoption and growth. We believe we are entering the market at the right moment to capitalize on the tremendous potential in the segment. 

“This monetization will also help us partly to pare down debt. Prime Focus will always continue to explore and evaluate opportunities to bring down debt across the Group.”

As part of the merger with Reliance Mediaworks’ FMS Business in India, Prime Focus had also inherited a 30% stake in Digital Domain-Reliance LLC.