Multiplex chains PVR Limited and INOX Leisure Limited have decided to merge to form the largest entertainment company in the country. The boards of both the companies on Sunday approved the amalgamation and the share exchange ratios.
Accordingly, INOX shareholders will receive three shares in PVR for 10 shares of INOX and after the merger, PVR promoters will have 10.62%, while INOX promoters will have a 16.66% stake in the combined entity.
How big is it?
After the merger, the promoters of INOX will become co-promoters in the merged entity along with the existing promoters of PVR. Further, the board of directors of the merged company would be reconstituted with a total board strength of 10 members.
Moreover, both the promoter families will have equal representation with two board seats each.
With PVR currently operating in 871 screens across 181 properties in 73 cities and INOX operating 675 screens across 160 properties in 72 cities, the combined entity will become the largest film exhibition company in India, operating 1546 screens across 341 properties in 109 cities.
Effect on market dynamics
The merger is expected to augur well for the growth of the Indian cinema exhibition industry, besides ensuring tremendous value creation for all stakeholders, including customers, real-estate developers, technology service providers, etc.
Ajay Balaji will be appointed as the managing director and Sanjeev Kumar would be appointed as the executive director.
Addressing the merger PVR and INOX said, “While strongly countering the adversities posed by the advent of various OTT platforms and the after-effects of the pandemic, the combined entity would work towards taking world-class cinema experience closer to the consumers in tier-2 and tier-3 markets”.
INOX had posted a revenue of Rs. 296.47 crore and a loss of Rs. 1.31 crore for the quarter (December 2021) while PVR made a loss of Rs. 24.53 crore on a turnover of Rs. 546.94 crore for the third quarter.
Siddharth Jain, Director of INOX Leisure quoted,
“As we head into the industry’s revival amidst headwinds, the decisive partnership would bring in enhanced productivity through scale, a deeper reach in newer markets and numerous cost optimization opportunities will continue to delight cinema fans with world-class experience and landmark innovations”.
Published By – Damandeep Singh
Edited By- Kritika Kashyap
