The Chennai-based GV Films is set to form a joint venture to start an entertainment village called Digipolis for an estimated Rs 1,000 crore (Rs 10 billion) at Panvel in Raigad district of Maharashtra.
Nearly 60 per cent of the project cost would be mobilised through debt, while the balance will be through equity. Both the partners will contribute Rs 200 crore (Rs 2 billion) each towards the equity. The company is also eyeing Gujarat and Tamil Nadu to set up theme parks.
GV Films plans to raise Rs 125-150 crore (Rs 1.25-1.5 billion) through a foreign currency convertible issue. The proceeds will be partially used to fund GV Films' equity contribution for Digipolis and the balance would be raked from the proceeds of a rights issue of about Rs 40 crore (Rs 400 million) and also through internal accruals.
Company sources said the board of GV Films would meet on Thursday to approve the FCCB issue. The agenda of the meeting includes restructuring the board.
FCCB issue is being preferred as it will allow GV to price conversion at a "decent" premium as a GDR or ADR issue is unlikely to fetch the company good premium, investment bankers said.
The company is also looking at expanding itself through the acquisition of an international media company. According to a company source, GV Films is in talks with an American media company to either acquire or set up a strategic alliance to have exclusive distribution rights for its films in India.