Multiplex chain operator PVR Ltd has terminated its agreement to acquire the cinema exhibition business of DT Cinemas Ltd, a DLF Group company. Both parties mutually agreed not to extend the period for completion of the pact. The agreement was cancelled as the condition for acquisition has not been met by DT Cinemas.
Both PVR and DLF officials remained tight-lipped on the specific conditions that were not met. PVR had signed the acquisition agreement with DT Cinemas in November last year. The consideration was to be met partly in the form of cash (Rs 20.2 crore) and partly by issuance of 25.57 lakh shares of the company to DT Cinemas Ltd on preferential basis in accordance with the SEBI regulations.
As per the terms of Business Transfer Agreement dated November 13, the deal stands terminated automatically if the conditions precedent for the acquisition were not satisfied within 60 days, unless the period has been mutually extended by the parties. However, the parties subsequently agreed mutually to extend the time for completion of the conditions precedent by DT Cinemas until February 15, 2010.
PVR said that the 60-day period and the mutually extended period have elapsed and the conditions precedent for the acquisition has still not been satisfied. PVR operates a cinema circuit consisting of 26 cinemas with a total of 108 screens spread over 14 cities.