PVR Ltd and INOX Leisure Ltd, two multiplex chains, have planned to initiate a merger to establish the country’s largest entertainment firm.
On Sunday, the boards of both firms authorised the merger and the share exchange ratios. As a result, INOX owners will get three PVR shares in exchange for ten INOX shares. PVR promoters would own 10.62 percent of the merged business after the merger, while INOX promoters will own 16.66 percent.
The promoters of INOX will join the current promoters of PVR as co-promoters in the amalgamated firm after the merger. In addition, the amalgamated company’s board of directors would be reconstituted, with a total board strength of ten members. Furthermore, with two board members each, both promoter families will have equal representation.
With PVR now running 871 screens across 181 properties in 73 cities and INOX currently operating 675 screens across 160 properties in 72 cities, the merged organisation will operate 1,546 screens across 341 locations in 109 cities, making it India’s largest film exhibition company.
The combination is projected to boost the Indian film industry’s growth while also creating significant value for all stakeholders, including customers, real estate developers, content producers, technological service providers, the government, and employees.
Ajay Bijli will take over as managing director, while Sanjeev Kumar will take over as executive director. In the amalgamated organisation, Pavan Kumar Jain will serve as non-executive chairman of the board, while Siddharth Jain will serve as a non-executive, non-independent director.
“The merged firm will be known as PVR INOX Limited, with current screens continuing to be branded as PVR and INOX,” PVR stated in a statement.
PVR INOX will be the name of the new theatres that open as a result of the merger. PVR and INOX announced that the merged organisation will endeavour to bring world-class movie experiences closer to customers in tier-2 and tier-3 markets, while also combating the challenges posed by the introduction of different OTT platforms and the after-effects of the pandemic.
For the quarter ending December 2021, INOX had a revenue of Rs 296.47 crore and a loss of Rs 1.31 crore. PVR lost Rs 24.53 crore in the third quarter on a revenue of Rs 546.94 crore.
“The film exhibition sector has been one of the worst impacted sectors as a result of the pandemic,” said Ajay Bijli, Chairman and Managing Director of PVR. “Creating scale to achieve efficiencies is critical for the long-term survival of the business and fighting the onslaught of digital OTT platforms.”
“As we head into the industry’s revival amidst headwinds, this decisive partnership would bring in enhanced productivity through scale, a deeper reach in newer markets, and numerous cost optimization opportunities, and continue to delight cinema fans with world-class experiences and landmark innovations,” said Siddharth Jain, Director, INOX Leisure.
The independent valuers chosen by INOX and PVR, Drushti Desai, Registered Valuer, Partner at Bansi S. Mehta & Co and SSPA & Co chartered accountants, have suggested a share exchange ratio. INOX received a fairness opinion from Ernst & Young Merchant Banking Services LLP, while PVR received a fairness opinion from Axis Capital on the share exchange ratio.
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