L Capital to Invest 605 cr in Reliance MediaWorks

LVMH's PE arm to buy a minority stake in co's 'yet-to-be-formed' subsidiary     LCapital, the private equity arm of the world's biggest luxury company LVMH, will invest . 605 crore in Reliance Media-Works, a film and entertainment company owned by industrialist Anil Ambani.  L Capital will acquire a substantial minority stake in the company, according to a person close to the deal who did not want to be named. The two parties have signed a term sheet or a preliminary agreement, and have agreed on an exclusivity period —during which both sides will refrain from exploring other alternatives — of eight weeks to close the transaction, the person said.  In an announcement on Wednesday morning, Reliance Media-Works said a private equity firm had invested in the company, but declined to name the investor. It said a term sheet had been "signed with a leading international private equity fund, in terms of which the potential investor has provided an indicative non-binding proposal to acquire a substantial minority stake in Reliance MediaWorks' Film and Media (RMW) services division for an investment of . 605 crore."  The money will flow in after the film and media services business is converted into a new subsidiary, and is subject to completion of due-diligence, documentation, and regulatory approvals, the company said.  Ravi Thakran, group president, South-East Asia and Middle East at LVMH and managing partner of L Capital Asia, could not be reached for comments. L Capital's India head Sanjay Gujral did not take calls and did not respond to text messages sent to his mobile phone.  L Capital, the private equity arm of French luxury group LVMH, has invested in two companies in India — Fabindia and Genesis Luxury Fashion. It has a $640-million Asian fund, out of which it has made six other investments — two each in Singapore, Mainland China and Hong Kong. One of those companies is Wanda, a leading mutliplex player in China, and which recently acquired AMC, a leading multiplex chain in the US.  In an interview with this paper in March this year, Thakran had said that the firm is exploring investment opportunities in India in what he referred to as "aspirational, affordable and alternative brands", which address the middle of the pyramid or middle-income consumers. It is looking at investing in the fashion and jewellery segment, alongside consumer brands, leather goods, watches, F&B, beauty and wellness, and media and entertainment.  Reliance MediaWorks, which is listed on the BSE and NSE, operates three main businesses: theatre distribution through BIG Cinemas, television production under BIG Synergy and a film and media services division, which does motion picture processing, audio restoration and image enhancement and visual effects, among other post-production works.  It is also India's first company to be awarded an Academy Award, winning this recognition at the Academy's scientific and technical awards 2012 for its proprietary image processing technology. The Reliance MediaWorks stock rose 5.51% to . 62.20 on the BSE on Wednesday.  nandini.raghavendra@timesgroup.com