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Photo: Mint
Photo: Mint

PVR’s acquisition of DLF’s DT Cinemas faces CCI concerns

PVR may have to sell some of its screens in Delhi to get clearance from CCI which has raised concerns that the deal will give the combined entity a monopoly in certain parts of Delhi

Mumbai: India’s largest multiplex chain PVR Ltd may have to sell some of its screens in Delhi to get clearance for its 500-crore acquisition of DT Cinemas, two people familiar with the development said.

According to the first of the two persons, who did not want to be identified, the Competition Commission of India (CCI) has raised concerns that the deal will give the combined entity a monopoly in certain parts of Delhi.

On 9 June, PVR said it will buy DLF’s cinema exhibition business housed under a subsidiary called DLF Utilities Ltd. DT Cinemas has 29 screens with approximately 6,000 seats at eight locations in National Capital Region (NCR) and Chandigarh.

PVR has already started identifying the screens it will have to sell to get the go-ahead, said the second person mentioned above, also requesting anonymity.

A DLF spokesperson declined to comment, while a PVR spokesperson was not immediately available for a comment.

The acquisition was aimed to help PVR expand its footprint in North India and help DLF bring down its debt burden. PVR has 467 screens across 105 locations in 43 cities.

“As a result of the proposed acquisition, PVR will have a presence in 44 cities with 115 multiplexes and 506 screens," PVR wrote to stock exchanges in June.

“It has been our strategy to expand our film exhibition business both organically and inorganically over the years. This acquisition in is pursuance of our core strategy to offer a world-class cinema experience to the discerning Indian consumer," said Ajay Bijli, chairman and managing director, PVR, while speaking to Mint after announcement of the deal in June.

In September, PVR had passed a resolution to raise 500 crore through a qualified institutional placement. In 2012, when it had acquired Mumbai-based Cinemax India, private equity funds Multiples Alternate Asset Management Pvt. Ltd, promoted by Renuka Ramnath, and its then existing investor L. Capital Asia Llc had backed the acquisition.

The multiplex business has seen a spurt of consolidation since last year.

The consolidation wave began in July 2014, when Inox Leisure Ltd, the second largest exhibition chain by screens, bought Satyam Cineplexes Ltd for more than 200 crore, including debt. With this, Inox expanded its presence to 50 cities, with 91 multiplexes and 358 screens.

In December 2014, Carnival Films Pvt. Ltd, backed by commodity trader Shrikant Bhasi, bought Anil Ambani-controlled Big Cinemas for 700 crore. Within a month, Carnival Films bought Stargaze Entertainment Pvt. Ltd from a unit of Mukesh Ambani-controlled Network18 Media and Investments Ltd for an undisclosed amount.

In the last few years, DLF has exited several non-core businesses to reduce debt. Its debt stood at 22,431.71 crore as on 30 September.

On Wednesday, DLF Ltd ended at 117 on BSE, down 0.68% from its previous close, while the benchmark Sensex fell 0.20% to close at 26,117.85 points. PVR Ltd ended at 847.80, up by 0.69%.

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