PVR-INOX merger gets NCLT approval

A PVR screen

Multiplex operators PVR and INOX on January 12 received the Mumbai bench of the National Company Law Tribunal's (NCLT) approval for their merger, sources tracking the development said.

The tribunal approved the scheme of merger in a verbal order and a written order is expected over the next 15-20 days.

The merger ratio that has been approved is three shares of PVR for 10 shares of INOX.

Last year on March 27, PVR and INOX Leisure had announced a merger deal to create the largest multiplex chain in the country with a network of more than 1,500 screens. PVR Chairman Ajay Bijli expects the screen count to increase to 3,000-4,000 screens in five years for the combined entity.

The merger was subject to approvals from the National Company Law Tribunal (NCLT), stock exchanges, Securities and Exchange Board of India (SEBI), as well as shareholders.

The combined entity will be named PVR INOX Ltd with new cinemas opened post the merger being branded as PVR INOX, the companies had said.

The two companies while announcing the merger had said that Ajay Bijli will be the Managing Director of the combined entity and Sanjeev Kumar would be appointed as the Executive Director.

Chairman of INOX Group Pavan Kumar Jain will be appointed as the Non-Executive Chairman of the Board. Siddharth Jain will be appointed as Non-Executive Non-Independent Director in the combined entity.

After the merger, INOX promoters will own a 16.7 percent stake, while PVR promoters will have a 10.6 percent stake in the combined entity.

According to analysts, the merged entity will have a 50 percent screen share within multiplex space in India and in terms of box office revenue, PVR and INOX have a combined box office share of 42 percent for Hindi and English content.

Edelweiss' Abhneesh Roy had noted that the combined entity will have much higher bargaining power in terms of rentals, content cost, marketing spends, F&B sourcing, and savings in many cost items.

Another analyst had said that the PVR-INOX merger will make the multiplex industry a tw0-player market in India.