India's century-old obsession with films seems to have drawn overseas financiers: Eros International, the nation's biggest distributor of movies, has hit the markets selling Bollywood dreams wrapped in dollar bonds to offshore buyers in the first such fund-raising by the world's most prolific cinema industry, reports Economic Times.
The high-yield bonds, which opened for subscription on Tuesday for raising a potential $230 million, are of five-year maturity and carry a fixed rate. The initial price guidance is about 8.25%. The bond-sale remained open for subscription till the time of going to press.“If the issuance sails through, this would be the first overseas debt-fund raising by any film entertainment company from India,“ said one of the executives on the Regulation S bonds for European and Asian buyers.
India's film industry is the world's second-oldest. S and P Global Ratings rated Eros International with 'B+' rating and gave the company a 'stable' outlook, citing its relatively large footprint in a fragmented Bollywood and Indian movie business. The grade is three notches lower than the investment grade at triple-B negative. “Our rating reflects Eros' good market presence in the fragmented Bollywood (Hindi) film production industry, which is smaller than Hollywood's,“ said S and P Global Ratings credit analyst Ashutosh Sharma in a note.
Leading stars Salman Khan, Deepika Padukone, and Akshay Kumar have made films under the banner of Eros, which did investor meetings in Hong Kong, Singapore and London for the bond sale. Some of the hit films made by Eros include Ki and Ka, Bajrangi Bhaijan, Welcome Back, Bajirao Mastani, and Singh is Bliing. “Overall, FY2017 will see an exciting movie collection for Eros of over 65 films driven by compelling stories in Hindi and other regional languages, making it the biggest future slate by any studio in India,“ Sunil Lulla, Eros' Executive vice chairman, said on its website. In the financial year 2015-16, the company reported sales of 1,603.55 crore, generating free cash flows of 300 crore.