PVR in talks with NBFCs, PE investors to lock Cinemax deal
MUMBAI: The management of PVR, India's third largest multiplex operator, has initiated active discussions with a group of private equity investors and non-banking finance companies (NBFCs) to finance its plan to buy the promoters of CinemaxBSE -6.50 %, another multiplex operator, for Rs 550 crore.
According to two independent sources, negotiations with Renuka Ramnath's private equity venture Multiples is believed to have reached an advanced stage. Multiples may invest Rs 150 crore for a minority stake in PVR LtdBSE -3.42 % by way of a preferential allotment of shares.
Existing investor L Capital - the private equity arm of luxury house LVMH - is also expected to make an incremental investment of Rs 85 crore in PVR, added the sources.
PVR promoters - led by Ajay Bijli, chairman and managing director - will also bring in some of their own equity to conclude the transaction. The debt financing is being syndicated by NBFCs such as Indostar and L&T Finance.
PVR in talks with NBFCs, PE investors to lock Cinemax deal
In August this year, L Capital Asia picked up a 10 per cent stake in PVR for around Rs 108 crore.
The two had announced their intention of entering into joint ventures for investment in various in-mall entertainment, gaming, food and leisure formats.
One of the sources mentioned above said, both L Capital and Multiples might have equal shareholding in PVR after the transaction. But this could not be verified independently.
As of September 2012, the promoters own 40.2 per cent stake in PVR, while domestic and foreign institutional investors together control 22.5 per cent in the company and the remaining 37.2 per cent are with public shareholders.
"The discussions are yet to close but it's at an advanced stage. There should be two back-to-back transactions and PVR would need to put together the equity required to finance the deal. A final announcement is due soon. The allotment will be a premium to the current market price," said an official aware of the ongoing negotiations who spoke on condition of anonymity as the talks are still private.
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