MUMBAI Theatre chain operator Pyramid Saimira Theatre Ltd clarified on Tuesday that some financial institutions, with whom promoters had pledged their stake, sold 6 percent in the firm between October and December.
Founder P.S. Saminathan sold 1.7 million shares, or 6.04 percent between Dec. 20 and Dec. 31, while Uma Saminathan, another promoter, sold 152,839 shares or 0.27 percent in the three months to December, disclosures to NSE showed.
The company clarified that it was facing a liquidity crunch and then suffered losses in a mega-budget film, 'Kuselan,' prompting the promoters to pledge some shares to raise funds.
Kuselan, a Tamil film which was also re-made in Telugu, was released in August 2008 and fared miserably on the box office.
"This is not direct selling by promoters, we want to clarify that," Kanhu Charan Sahu, company secretary, told Reuters, adding the sale was at the prevailing market price.
P.S. Saminathan, also managing director of Pyramid, now holds 5.09 million shares or 17.99 percent in the cinema operator.
Shares in the firm opened nearly 5 percent down at 33.80 rupees and closed at the same level in choppy Mumbai trading.
As the current period is the peak season in south India for film release and confirmations, the firm hopes its locked-in money will be released, easing the cash crunch.
"Hence, P.S. Saminathan and Uma Samithan decided to transfer certain shares and requested financial institutions to sell the same for short-term loans that the company had taken," it said in the statement to the stock exchange.