NEW DELHI — PVR, India's largest multiplex chain, today said it was acquiring DT Cinemas for Rs 500 crore on a slump sale basis, or without assigning specific values to individual assets and liabilities.
DT Cinema's owner DLF has been trying to get rid of non-core businesses to cut its huge debt burden of over Rs 20,000 crore. PVR and DLF had previously explored sale of DT in 2009 but had not been able to reach an agreement.
DT Cinemas operates 29 screens with a seating capacity of more than 6,000. "As a result of the proposed acquisition, PVR will have a presence in 44 cities with 115 multiplexes and 506 screens," PVR said in a statement.
"It has been our strategy to expand our film exhibition business both organically and inorganically over the years. This acquisition is in pursuance of our core strategy to offer a world class cinema experience to the discerning Indian consumer," Ajay Bijli, Chairman and Managing Director, PVR Ltd said.
"The deal is in line with our strategy to focus on our core business and divest non-core businesses or assets...It shall provide the management a more focused approach for enhancing value especially in our retail mall business," DLF's Sr Executive Director Saurabh Chawla said.
The cineplex sector has seen several deals in a wave of consolidation. In December, Carnival Group acquired Big Cinemas — that has a presence both in India and the United States — for an estimated price of Rs 700 crore, the biggest ever deal in this space.
In January, Mexican multiplex chain operator Cinepolis acquired Essel Group's Fun Cinemas for an undisclosed sum. Last year Network18, which owns news and entertainment channels and is majorly owned by Reliance, exited from this sector by selling its stake in Stargaze Entertainment to Carnival Films. In July 2014, Inox Leisure acquired Gurgaon-based rival Satyam Cineplexes in a Rs 182-crore deal to strengthen its presence in North India.
Shardul Amarchand Mangaldas & Co. was the legal adviser to PVR and EY India and Luthra & Luthra were financial and legal advisers respectively to DLF.
(With agency inputs)