On March 15, gaming and sports media company Nazara Technologies reported to the stock exchanges that its subsidiaries Kiddopia Inc. and Mediawrkz Inc. had transferred Rs 60 crore ($7.25 million) out of Rs 64 crore ($7.75 million) of its cash reserves from Silicon Valley Bank (SVB) to external bank accounts. The rest of the amount is kept in SVB itself for unrestricted operational use.
In a stock market filing, the company said, “We would like to inform that both the companies i.e. Kiddopia Inc and Mediawrkz Inc have been given unrestricted access to the entire amount of $7.75 million (~Rs 64 crore) that was held at SVB.”
A couple of days ago, founder of Nazara Technologies, Nitish Mittersain stated that despite the money stuck in SVB, both the subsidiaries have positive cashflow and there was no need to panic.
“This money was lying unused for a long time. But what we were stressed about is that $7-$8 million is a decent sum of money that got stuck and potentially could have gotten lost. So obviously, we were not happy about that situation,” Mittersain said in an interview with Moneycontrol.
The company also announced that it will be diversifying the cash reserves to further avoid these kinds of situations. “At a group level, we have almost Rs 600 crore – Rs 700 crore reserves. We usually do not have more than 10 percent exposure to a particular bank in the overall Nazara group. What we will probably do is reduce that to maybe 5 percent threshold for further diversification,” Mittersain said recently.
The SVB collapse is being regarded as arguably the biggest bank failure since the 2008 financial crisis in the United States. The Federal Deposit Insurance Corp. (FDIC) has now stepped in and taken over SVB client deposits and announced that all the depositors will be fully protected.