Multiplex chains PVR and INOX Leisure are a step closer to setting up India’s largest film exhibition company with the Mumbai bench of the National Company Law Tribunal (NCLT) approving their merger on Thursday.
The merged entity, to be called PVR-INOX, will be operating over 1,500 screens across 341 properties in 109 cities. The companies had announced a merger deal on March 27, 2022.
The approved merger ratio is three shares of PVR
“The National Company Law Tribunal (NCLT), Mumbai bench, has allowed the proposed scheme today, ie, 12th January 2023,” PVR said in a stock exchange filing.
The merger has already been approved by the respective shareholders of the two companies, the creditors, both the stock exchanges as well as the Competition Commission of India (CCI).
However, non-profit group Consumer Unity & Trust Society (CUTS) had on December 14, 2022, moved the National Company Law Appellate Tribunal (NCLAT), challenging the CCI approval to the merger, and the matter was adjourned till February 9, 2023. In its petition, CUTS has also made PVR and INOX parties to the case in NCLAT. Its earlier appeal in the NCLT challenging CCI’s approval to the merger was rejected by the tribunal in September.
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CUTS had raised a complaint with the CCI against the proposed merger, which was rejected by the fair trade regulator through its order passed in September 2022. CCI had rejected the complaint on the grounds that apprehensions of the likelihood of anti-competitive practices by an entity cannot be a subject of the probe.
PVR and INOX have said after the merger, the combined entity plans to open 200 new screens annually under the name PVR-INOX, with a capital expenditure of Rs 500 crore. The companies will not look at refurbishing old properties, and the existing screens will continue to operate as PVR and INOX separately. Till such time that the merger comes into effect, both companies will continue to open screens and expand in different geographies.
The combined entity also plans to ramp up the food and beverage business and venture into film production as means to diversify revenue.
Analysts have estimated that PVR-INOX will command a 50% share among multiplex screens and 16% in the overall market, including single screens, after the merger. In terms of shareholding in the merged entity, the INOX promoters will hold 16.66%, while the PVR founders’ share will be 10.62%.
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Pavan Kumar Jain, non-executive chairman of INOX, will be the non-executive chairman of the merged entity, while Ajay Bijli, chairman and managing director, PVR, will be its managing director. Sanjeev Kumar Bijli will be the executive director and director of INOX Leisure