In a cash-cum-equity swap transaction, Multiplex chain PVR has acquired real estate company DLF’s cinema business — DT Cinemas — for Rs 60 crore. This includes Rs 20.2 crore in cash and 25.6 lakh shares (10% of the diluted equity base) worth Rs 40 crore. Simultaneously, PVR issued 10% fresh shares on preferential basis to Thailand-based company Major Cineplex for an estimated Rs 42 crore for 25.6 lakh of new shares.
Since PVR’s equity base is expanding by little over 18% as result of these two transactions, the promoters’ stake in PVR will be diluted to 34% from the current level of 41.24%. On a fully consolidated basis, both DLF Group and Major Cineplex will own about 9.1% stake each.
PVR will now control 60-70% of the market share in Delhi and Gurgaon markets, which will further strengthen PVR’s position as one of the largest multiplex players in India. DT Cinemas will be rebranded as PVR.
DT Cinemas owns and runs 26 screens and will add three more screens in the next six months. All the acquired cinemas are on long-term lease in various malls owned or operated by the DLF Group. In addition, PVR will be offered exclusive rights to operate as a key anchor multiplex partner in all future mall development planned in cities like Delhi (Chanakaya Puri), Mumbai, Chennai, Hyderabad, Noida, Jalander, Lucknow, among others.
PVR currently operates 26 cinemas with a total of 108 screens spread over 14 key cities in India. It has three brands — the no-frills cinemas PVR Talkies, mid-market brand PVR Cinemas and premium brand PVR Premier.