Shares of microcap movie exhibition company Cineline India were locked on 20% upper circuit after the company announced on December 10 its approval to sell a subsidiary that owns Hotel Hyatt Centric, Goa at an enterprise value of at least Rs 270 crore.
Cineline India's market capitalisation is around Rs 480 crore and is part of the Kanakia Group, which has interests in real estate, hospitality, entertainment. The company runs film exhibition business and operates multiplex chains across India.
While announcing the approval for the sale of 100% shareholding in R&H Spaces - the wholly-owned subsidiary - Cineline said the go ahead was first accorded in June 2024 to close the transaction by September. Later on, the timeline for identifying a buyer and finalizing the deal was extended till March 2025. The Board now find a buyer and close the deal by the revised deadline.
Cineline India informed stock exchanges about the plan to "...sell the Investments in 100% equity shares of R&H Spaces Private Limited on such terms and conditions as may be agreed between the Company and the potential buyers for an aggregate consideration of not less than Rs 270 crore, subject to obtaining all requisite approvals, including shareholder consent." The sale transaction will not be a related-party transaction, Cineline added.
As on March 2024, the subsidiary owning the Goa hotel, R&H Spaces' total income was Rs 58.74 crore, and net profit was Rs 38.42 lakhs. Goa's Hyatt Centric is a 168-key, 5-star hotel located close to the Candolim beach, and targets both leisure and business travellers.
Cineline India was one of the earliest players in the multiplex business in India until it sold the business to PVR. Later, in 2022, the company shared plans to enter the multiplexes business again. Cineline has an expansion plan that involves adding new properties in Gurugram and Zirakpur, Punjab. It targets to acquire fully fitted, plug-and-play screens and renovates
existing ones to reduce cost.
The company has an asset-light and debt-light model, and had sold asset worth Rs 81 crore last fiscal, using the proceeds to reduce debt, along with an infusion of Rs 45.2 crore from
promoters and Rs 15 crore from an investor.
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