PVR Cinemas, which is the India’s biggest multiplex operator, has acquired DLF owned DT Cinemas against deal of Rs. 500 Cr. By this acquisition, PVR has strengthened its presence in the multiplex movie business. DLF’s DT Cinemas has been operating 29 screens across the region of Delhi NCR with a proposal of adding two new properties in NCR and Chandigarh.
How will it help PVR?
With this deal PVR becomes of the biggies in movie exhibition business because with getting DT Cinemas in the pocket, control of more than a quarter of screens is now in its hand. Now PVR can go for bargaining with movie producers and distributors. On the other hand, DLF is looking for reducing its debt. DLF is looking for the double benefit- One, it will get cash reserve and get lease rent from PVR.
In an earlier note, Competition Commission nodded over the PVR desired acquisition of DLF entertainment segment under named as DT Utilities. It also asked to exclude certain assets so as to ascertain anti-competitive issues. The follow up started long before in June 2015, when multiplex giants offered a proposal desiring to acquire DT Cinemas for 500 crores INR. Similarly, the conglomerate did the same in February 2010 long before the acquisition took place, as quoted by Press Trust of India (PTI).
What DLF & PVR said about this deal?
The deal is in line with our strategy to focus on our core business and divest non-core businesses or assets,” Saurabh Chawla , senior executive director at DLF, said in a statement.
“This acquisition is in pursuance of our core strategy to offer a world-class cinema experience to the discerning Indian consumer,” said Bijli, chairman and managing director of PVR.
With this deal, PVR has become the biggest one which has 467 screens where Inox is in the second position with 372 screens and carnival cinemas in the third position with 211 screens.
Lease Rental Business between PVR and DLF
DLF will lease out their properties on a contract of 10-15 years. But it’s not against a one-time deposit.
“Typically, the lease rental will be about 15% of the gross revenue from these premises, including the exhibition and food business,” a senior executive of DLF said.