Prime Focus Group has divested 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 (DDHL), that is headquartered in Hong Kong, and whose shares are listed on the Main Board of The Stock Exchange of Hong Kong. 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 $55 million worth of shares in the Hong Kong listed DDHL based on an issue price of HK$ 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 $30 million. As part of the possible JV transaction worth $25 million, Prime Focus Group will, infuse $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.
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