PVR Cinemas to acquire southern multiplex major SPI Cinemas

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Multiplex theatre major PVR Ltd on Sunday said its Board of Directors has approved the acquisition of 71.69 per cent stake in SPI Cinemas Pvt Ltd, involved in the business of movie exhibition and allied businesses, for Rs 633 crore.

In a regulatory filing in BSE, the company said the acquisition of the stakes in SPI Cinemas will be from two shareholders viz 61.65 per cent from SS Theatres LLP and 10.04 per cent from S.V. Swaroop Reddy.

The Board of PVR also approved provisions for customary call/put options for the acquisition of the remaining 28.31 per cent stake in SPI Cinemas from SS Theatres, if triggered for a consideration not exceeding Rs 300 crore.

The completion of acquisition is expected to be over within 30 days from the execution of share purchase agreement (SPA) and the amalgamation within a period of 18 months from the date of completion of acquisition or some other mutually agreed date between the parties to the SPA.

According to PVR, the acquisition is subject to the regulatory approvals.

The SPI Cinemas has an asset base of Rs 319.63 crore, turnover of Rs 309.60 crore and net worth of Rs 73.74 crore as on March 31.

The acquisition of SPI Cinemas will give PVR a strong foot hold in the southern market.

The SPI Cinemas has 76 screens across 17 properties in 10 cities, with 13 screens to be opened in the next 12 months.

According to the regulatory filing, as part of the amalgamation SS Theatres will get 18.19 per cent fully paid up equity shares of PVR for every fully paid up equity shares of SPI Cinemas held by SS Theatres.

The acquiring company PVR said Rs 100 crore - part of the price - will be paid on deferred basis on achievement of milestones.