Gramophone to merge RPG Global with Saregama Plc

Gramophone Company of India is merging Mauritius-based RPG Global Music with London-based Saregama Plc in a bid to consolidate its overseas operations. Gramophone holds 100 per cent stake in RPG
Global and 72 per cent in Saregama Plc.

The move is part of the company’s strategy to get Saregama Plc listed in other overseas stock exchanges. Saregama Plc is already listed at the OFEX, London. The company has plans to get listed on the London Stock Exchange by 2001.

"We plan to consolidate our two global subsidiaries before we decide on how to move forward. It is definitely a dream to get listed in other global stock exchanges. But we have to first know what we are going to do with the funds. We haven’t thought of that yet," said Gramophone Company of India Managing Director K. Krishnan.
Gramophone plans to get through the merger process by March, 2001. The company recently appointed Ernst & Young to do the valuation of RPG Global. Besides music rights to some south Indian movies, RPG Global has a distribution network in the Middle East.
Ernst & Young is expected to complete the valuation by the first week of December. This will be sent for review to Smith and Williamson, the statutory auditors of Saregama Plc. "We will bring the matter up in the board meeting, after all these processes are over. By the last quarter of the current financial year, we should be able to get a clear picture of the swap ratio," said N Sathasivam, Vice President, Commercial, Gramophone Company of India.

Gramophone’s holding in Saregama Plc will go up after the merger, as it has 100 per cent stake in RPG Global. Said Manish Bhandari, analyst at Renaissance Securities, "The merger will simplify the structure of Gramophone and extend Saregama’s presence all over the world. The profitability and valuation of Saregama Plc would increase substantially."

Saregama Plc pays Gramophone a royalty of 18 per cent. It distributes Gramophone’s products in the US and European and African markets.

Through Saregama.com, it carries out e-commerce activities. Saregama Plc charges a transaction fee for distributing the products through Saregama.com in India.

RPG Global Music, which caters to the Middle East, the Far East and South East Asian markets, plans to open up distribution centres in Thailand, Hong Kong and Korea soon.

Gramophone’s plan is to eventually have two companies: Saregama Plc for the world market and Saregama India for the local market. "We have changed the name from Gramophone to Saregama India a week back," Krishnan said.

Sibabrata Das

  More News>>>>
STAR tops in entertainment, Sahara in evening news
Gramophone bags music rights of two films for Rs. 3 cr. each
Pentamedia may hive off Num TV into subsidiary
Balaji Telefilms, Nine Network in stock swap deal
Jab Khelo Sab Khelo ratings below par - INTAM
Doordarshan plans major revamp
Sapru to quit SABe TV, may join Reliance
Quiz sites catch KBC trivia-fever
UTV Software Communications CEO Mody quits
Zee Sports to be launched soon

TOP