PE firm to pick 10% stake in PVR

Private equity fund L Capital Eco will pick up 10 per cent stake in PVR for Rs 57.7 crore as part of the Rs 108-crore investment in the cinema exhibitor.

L Capital Eco, a subsidiary of private equity fund L Capital Asia LLC, will invest Rs 57.7 crore to pick up 10 per cent stake.

The PE firm will also pump Rs 50.1 crore into a new subsidiary to be set up by the two companies to invest in various in-mall entertainment, gaming, food and leisure formats.

"L Capital has a strong global reach and has already made introductions to multiple international entertainment, leisure and F&B concepts. We will work with them to expand our entertainment business across the country and bring innovative formats to India," PVR Joint Managing Director Sanjeev Kumar Bijli said.

L Capital will subscribe to 28.85 lakh equity shares in PVR at a price of Rs 200 per equity share (a premium of about 21 per cent over the closing stock price of Rs 165.95 per share on NSE on July 31, 2012).

Also, the two companies will enter into a joint venture to invest in various in-mall entertainment, gaming, food and leisure formats. L Capital will initially invest Rs 50.1 crore in the JV.

PVR's existing investment in PVR bluO Entertainment Ltd will now be held through this new subsidiary company.

The joint venture will be subject to the receipt of FIPB approvals.

PVR on Wednesday posted a 51 per cent dip in net profit at Rs 7.56 crore for the quarter ended June 30, 2012 as against Rs 15.49 crore in the same period last year.

"In Q1 FY'12, PVR had sold off property in Phoenix Mills, Mumbai, which fetched Rs 16.96 crore. Service taxes, which is a new thing, also happened in this (Q1 FY'13) quarter. On sequential basis, it has been a good quarter," Bijli said.

The company had registered a net loss of Rs 13.24 crore in the January-March 2012 quarter.

The company's total income from operations stood at Rs 177.36 crore in the reported quarter, up over 51 per cent from Rs 117.36 crore in the corresponding quarter last year.

"In this fiscal, we are looking at adding about 70 screens and in the next 2-3 years, some 300 screens. We are also expanding bluO operations across cities like Bangalore and Pune," he said.

He added that the company is "evaluating" and will launch other F&B formats in the next 4-6 months, under the partnership with L Capital.