PVR has signed definitive agreements with L Capital Eco Ltd, a subsidiary of private equity (PE) firm L Capital Asia,following which the PE firm will invest close to Rs 108 crore in PVR and will form a joint venture with it for investment in its multiplex, in-mall entertainment, gaming, food and leisure formats, according to a company filing with the BSE.
Under the agreement, L Capital would invest Rs 57.7 crore under the preferential allotment route in PVR Ltd, the entity that runs PVR’s multiplex business, for 10% fully diluted stake. L Capital would subscribe to 28,85,000 million equity shares in PVR at a price of Rs 200 per equity share (a 21% premium over its closing stock price of Rs 165.95 on 31st July).
Apart from that, L Capital will invest Rs 50.1 crore to set up a joint venture with PVR that will focus on in-mall entertainment, gaming, food and leisure. With this investment, L Capital will hold 44% stake in the JV and PVR will hold 51% stake while remaining stock options will be allotted to the management. The ownership of PVR’s existing investment in PVR BluO Entertainment Ltd, its JV with Thailand-based Major Cineplex Group, will now be transferred to the new company. The joint venture will require an approval receipt from Foreign Investment Promotion Board (FIPB).
The company says that it intends to evolve into a full scale lifestyle entertainment company in the next 4-5 years. PVR, which currently operates with 179 screens across 24 cities in India, and also operates a film distribution business through its subsidiary, PVR Pictures. PVR Ltd clocked revenues of Rs 177.36 crore in the quarter ended 30th June 2012, with a profit of Rs 7.81 crore on a consolidated basis.