Merger of PVR-INOX: The new company will have 1546 screens in 109 cities, the cinema experience of the customers will increase; Ajay Bijli will be the MD
India’s leading multiplex chain PVR (Transfer Company) has decided to merge its operations with Inox Leisure (Transfer Company), the second largest multiplex chain. Earlier, there was talk of PVR’s merger with the local unit of Mexican company Cinepolis. Both PVR and INOX are public listed companies. The boards of both the companies met on Sunday to approve the merger.
INOX will be the largest shareholder
Inox Leisure will be the largest shareholder in the new company. The promoters of INOX will become co-promoters in the new company along with the existing promoters of PVR. The Board of Directors will be reconstituted with a total strength of 10 members. Both the promoter families will get 2 seats each on the board. The merger will not require approval from the Competition Commission of India as the combined revenue of both the companies is less than Rs 1,000 crore due to the corona pandemic.
Ajay Bijli will be the Managing Director
Pawan Kumar Jain will be made the non-executive chairman of the board. PVR’s CMD Ajay will be the electricity managing director, and will continue operations with full management control. Sanjeev Kumar will be appointed as Executive Director. Siddharth Jain will be made a non-executive non-independent director.
Customers will get a great cinema experience
In the release issued by the company, it has been said that this decision has been taken keeping in mind the customers. The focus of the merger is to harness the strengths of both the companies to deliver exceptional customer service and cinema experience. The new company will also work towards taking the world-class cinema experience to Tier 2 and 3 markets.
Merger was necessary to compete with OTT
Bijli, CMD, PVR said, “The partnership of these two brands will place the consumer at the center of their vision and provide them with an immersive cinema experience.” He said, “The film exhibition sector has been one of the worst affected sectors due to the pandemic. In such a situation, this merger was very important to compete with the digital OTT platform and for the long term survival of the business.
Ticket prices may drop
Siddharth Jain, Director, INOX, said, “The merger will increase access to new markets and create opportunities for cost optimization. Cost optimization refers to reduction in expenses and costs while increasing business value. According to experts related to this matter, due to cost optimization in the coming days, ticket prices may also come down.
The new company will have 1,546 screens in 109 cities
INOX currently operates 675 screens in 160 properties across 72 cities, while PVR operates 871 screens in 181 properties across 73 cities. The new company will become the largest film exhibition company operating 1,546 screens across 341 properties in 109 cities. Its competitors Carnival Cinemas and Cinépolis India have 450 and 417 screens.
PVR INOX will be the new name
The name of the new company will be PVR Inox Limited. The old screen branding will remain the same as PVR and INOX. The new cinema hall opened after the merger will be bonded as PVR INOX. Inox promoters will hold 16.66% stake in the new company, while PVR promoters will hold 10.62%.
3 shares of PVR for 10 shares of INOX
The companies, in their joint release, said the merger would require Inox and PVR shareholders, stock exchanges, SEBI and other regulatory approvals. The share exchange ratio for the merger would be 3 shares of PVR to 10 shares of INOX. That is, the shareholders of INOX will get shares of PVR under the share exchange (swap) ratio.
Shares of PVR closed 2.84% higher at Rs 1,827.60 on the BSE on Friday, while Inox shares closed 6.10% higher at Rs 469.70.
