PVR has announced that it has signed definitive agreements with L Capital Eco Limited (L Capital), a subsidiary of L Capital Asia LLC, to invest an amount of approximately Rs 108 crore in PVR’s cinema exhibition and in-mall entertainment businesses.
Under the terms of the agreements, L Capital shall invest an amount of Rs 57.7 crore under the preferential allotment route in PVR Limited, the listed entity which runs the cinema exhibition business for a 10 per cent fully diluted stake, wherein, subject to receipt of the necessary statutory approvals, L Capital shall subscribe to 28,85,000 equity shares in PVR Limited at a price of Rs 200 per equity share (a premium of approx. 21 per cent over the closing stock price of Rs 165.95 per share on NSE on Tuesday, 31st July, 2012).
In addition to the above, PVR and L Capital will enter into a joint venture to invest in various in-mall entertainment, gaming, food and leisure formats. For this purpose, L Capital will initially invest Rs 50.1 crore into a new subsidiary being set up by PVR, and PVR’s existing investment in PVR bluO Entertainment Ltd will now be held through this new subsidiary company. This joint venture will be subject to the receipt of FIPB approvals.
Commenting on the partnership, Ajay Bijli, Chairman and Managing Director of PVR said, “We are delighted to induct L Capital as strategic investors in our business. This partnership will help us to build and expand our core cinema exhibition business and expand our in-mall entertainment portfolio. This is in line with our vision to evolve into a full scale lifestyle entertainment company over the next four to five years. L Capital has a strong global reach and has already made introductions to multiple international entertainment, leisure and F&B concepts. With their active involvement, we expect to be able to bring multiple such concepts to India. This investment by L Capital is one of the significant investments in the Indian multiplex sector in recent times and bears testimony to the immense faith that L Capital have reposed in the business model, promoters and the management team of PVR.”
Ravi Thakran, Managing Partner of L Capital Asia LLC said, “Ajay and Sanjeev Bijli are the perfect embodiments of the new generation of Indian entrepreneurs, who are visionary, super professional, diligent and very hard working. Besides that, they are both delightful and it is great working with them. L Capital is very proud to be entering into this partnership with PVR to accelerate the growth of its present business as well as build large adjunct in-mall entertainment, gaming and F&B businesses. We generally believe that the combined leverage of L Capital and PVR and complementary set of values will create a multiplier effect and PVR will become a best-in-class company in the world that the whole nation will be very proud of”.