The Industrial Development Bank of India has taken over the studios of CMM Studios under the Securitisation Act. The financial institution took over the property of CMM on August 13.

The FI had issued a notice under the Securitisation Act on April 3. The channel owes Rs 49.18 crore (Rs 491.8 million) to the institution.

The other major lenders to the channel is State Bank of India to whom the channel owes around Rs 10 crore (Rs 100 million).

CMM Studios was a post production studio which had regular clients such as MTV, B4U, Channel V, Star and ETC. The studio also had facilities put up for recording, graphics and had equipment such as cameras and lights.

When contacted, CMM Studios' promoter and managing director Kirit Mehta said that the takeover was done by mutual consent.

"In a way, this is a god-sent opportunity for us as we were anyway wanting to get out of this place for a very long time. This building where our studio is situated is very unlucky," he added.

The company had raised initial funding in 1995 through a consortium from IDBI and SBI for setting up the studio. The initial funding raised from IDBI then was Rs 11 crore (Rs 110 million) and from SBI was Rs 2 crore (Rs 20 million).

Mehta said that after the interest rates and all extra charges have been added, the figures have now  bloated to Rs 49 crore (Rs 490 million) to be paid to IDBI and Rs 10 crore to be paid to SBI.

Mehta is also a director on another company CMM Broadcasting Network which runs the Indian faith and spiritual channel 'Aastha' and 'CMM Music'. The channels are beamed from PAS-10 satellite.

Mehta clarified that the broadcasting company was a separate standalone company and had nothing to do with the studio.

The broadcasting company had appointed Ernst & Young to value the intrinsic worth of its two channels. However, for the time being the exercise has been put on hold keeping in mind the current state of the media industry.

The idea of asking E&Y to value the two channels was to help the company to rope in more strategic investors. If the plan succeeds, the channels will be able to undertake its expansion plans.