Discussions on with Cinemax for stake buy, says PVR

Written by fe Bureau | Agencies | Mumbai | Updated: Nov 28 2012, 08:31am hrs
Multiplex firm PVR said on Tuesday it is in talks with the Kanakia Group-promoted Cinemax India, for stake purchase, which could make the Gurgaon-based PVR the largest multiplex chain in the country.

This announcement comes on the back of recent reports that said that the Kanakia family is looking to sell the chain to focus on their core business of real estate development. "It is engaged in active discussions with the promoters of Cinemax India for a potential purchase of their shares in Cinemax. However, no definitive agreements have been entered into in this respect," PVR said in a statement. The Kanakia family owns 69.27% stake in Cinemax India, while Mavi Investment Fund and ICICI Prudential Life Insurance own another 7.91% in the company as on September 30, 2012.

If the deal goes through, PVR will have access to 39 properties of Cinemax, including 14 locations in Mumbai. With this acquisition, PVR will have access to 138 screens including about 45 screens in Mumbai. At present, PVR has about 213 screens and has plans to open 500 screens by 2015. PVR currently has 46 properties.

PVR will have to take on debt to fund this transaction, analysts say, adding that the premium would be more than 10% as Cinemax is profitable.

As of September 30, PVR had cash and cash equivalent of Rs63.95 crore.