PVR buys DLF’s DT Cinemas

PVR signed an agreement to acquire DT Cinemas and has decided to offload 10% equity to Cineplex Group.

In two separate deals,multiplex major PVR on Friday signed an agreement to acquire DLF’s DT Cinemas and has decided to offload 10 per cent equity to Thailand-based entertainment company Major Cineplex Group for Rs 42 crore.

Through these deals,PVR aims at consolidating its position in the highly competitive entrainment market and expanding footprint across the country.

DT Cinemas buyout is a cash and stock deal,under which DLF will get Rs 20.20 crore from PVR and have 10 per cent stake in the new merged entity.

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The DT deal will take PVR’s total screens to 137,from 108 at present,taking its market share in Delhi and Gurgaon to 60-70 per cent.

“We will acquire DLF’s DT Cinemas on a slump sale basis.

This will add to our screens and help us in expanding our presence across the country,” PVR Chief Financial Officer Nitin Sood said.

PVR plans to add another 100 screens over the next 18 months at a cost of about Rs 100 crore,he added.

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Major Cineplex Group would invest about Rs 42 crore in PVR by subscribing to 25.57 lakh new shares.

“We are looking at raising debt of about Rs 50-60 crore for expansion,” Sood said. “With MCG investment,we would have about Rs 90-100 crore cash for expansion,organically and inorganically,” he added.

PVR will pay Rs 20.20 crore to DT Cinemas,apart from issuing it 25.57 lakh of its shares,representing 10 per cent of the fully diluted paid up share capital.

As part of agreement with DLF,PVR will also get exclusive rights to operate as a key anchor multiplex partner in all future mall developments of the DLF Group. DLF’s future mall projects include cities like Delhi,Mumbai,Chennai,Hyderabad,Noida,Jallander and Lucknow.

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Thailand’s MCG is paying PVR Rs 165 per share,a premium of 19 per cent over the closing stock price of PVR of Rs 139 on the National Stock Exchange on November 12,2009.

With a turnover of about Rs 805 crore,MCG currently operates about 350 multiplex screens,500 bowling lanes,300 karaoke rooms and two ice skating rinks.

“We have had a partnership with MCG for our bowling venture PVR Blu-O and we wish to extend our retail and entertainment portfolio. We want to introduce new formats like ice skating and fitness centres as well,” Sood said.

MCG Chairman Vicha Poolvaraluck said in a statement that the group will help PVR consolidate its position. Shares of PVR on Friday closed Rs 139.80 on the BSE,up 1.12 per cent from its previous close.