Mumbai, Apr 18 (IANS): Entertainment major Eros International and STX Filmworks on Saturday said that they have entered into a definitive stock-for-stock merger agreement to create the first "publicly traded, independent cont ent and distribution" company with global reach and unique positions in the US, India and China.
Accordingly, the combined company will be called Eros STX Global Corporation with $125 million of incremental equity.
It will boast a strong and revamped capital structure and superior liquidity position at close with $264 million of pro forma net debt, $195 million of pro forma cash balance and $120 million of available revolver capacity as of December 31, 2019, the statement said.
"The combined company, which following the consummation of the transaction will be publicly traded on NYSE, will possess a strong management team led by highly experienced executives from both entities," the statement said.
In terms of transaction, STX Entertainment will merge with a newly formed subsidiary of Eros International and will survive as a wholly owned subsidiary of Eros International.
"The stock-for-stock, merger-of-equals transaction calls for the combined company to utilize Eros International's existing dual-class share structure. Eros B Ordinary Shares which will continue to be owned by the Eros International founder group will retain their 10:1 voting rights while Eros Ordinary Shares will carry one vote per share," the statement said.
"Pursuant to the merger agreement, STX Entertainment shares will be converted into contractual contingent value rights that will be settled for Eros Ordinary Shares approximately 75 days after the effective time of the merger."
"The combined company will be domiciled in Isle of Man, and headquartered in both Mumbai, and Burbank, California, USA," the stateme nt said.
Additionally, the statement said that the combined company is projected to release approximately 40 feature length films, including seven sequels to prior hits and 100-plus originals of episodic content, in 2020.