Two step-down subsidiaries of Nazara Technologies, an Indian gaming and sports media platform, have cash balances 64 crore in Silicon Valley Bank (SVB). Rekha, wife of late market mogul, Rakesh Jhunjhunwala, is one of the largest public shareholders in Nazara. Due to concerns about cash crunch, the California Department of State closed SVB and made the Federal Deposit Insurance Corporation (FDIC) the bank’s receiver to handle depositors’ money.
Nazara’s two subsidiaries are Kidopia Inc. and MediaWorkz Inc.
In a regulatory filing, Nazara said, “Subsidiaries Kidopia Inc. and MediaWorks Inc. have cash balances of Silicon Valley Bank (“SVB”), currently known as the Federal Deposit Insurance Corporation (FDIC, Kiddopia Inc. and Mediawrkz Inc. The balances held by the SVB cumulatively amount to $7.75 million ( 64 crores).”
Kidopia is a 100% subsidiary of Paper Boat Apps, and Mediaworx is a 100% subsidiary of Dataworx Business Solutions.
Najara holds 51% stake in Paper Boat and 33% in Dataworx business.
“The FDIC has said it will issue advance dividends to depositors within the next week, as will future payments coming in the form of asset sales,” Nazzara said in the filing. Regardless of the final outcome and its timing, both subsidiaries Continues to be well capitalized. And generating positive cash flow along with profitability.”
Therefore, Nazzara said, “we expect that there will be no impact on their daily operations, business performance and growth plans due to the SVB event.”
In addition, Nazara said that the group continues to maintain healthy reserves of cash and cash equivalents. 600 crores excluding SVB-affected funds.
In conclusion, Nazzara said, “The situation with SVB remains volatile and the company will keep all stakeholders and the public at large updated on further developments.”
Last week, on Friday, Nazara’s stock closed at a price of 517.75 on the BSE, down 1.47%. Its market cap is around 3,426.16 crores.
As per the shareholding pattern, as on December 31, 2022, Rekha Jhunjhunwala holds 65,88,620 equity shares or 10% stake in Najara.
On Sunday, US Treasury Secretary Janet Yellen said the federal government would not bail out SVB. However, the government is working to help the depositors who have money in the bank.
According to FDIC data, as of December 31, 2022, SVB had total assets of $209.0 billion — while its total deposits stood at approximately $175.4 billion. About 89% of the bank’s total deposits are not insured.
All insured depositors will have full access to their insured deposits as of Monday morning, March 13, 2023, the FDIC said. While they will pay advance dividend to uninsured depositors within the next week. In addition, it stated, as the FDIC sells Silicon Valley Bank assets, future dividend payments may be made to uninsured depositors.
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