The mega merger of PVR Limited and Inox Leisure Limited is with a view to improve balance sheet of the companies tide away from the slowdown in the multiplex business, Ajay Bijli, Chairman and Managing Director at PVR tells Zee Business Executive Editor Swati Khandelwal.

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The CMD said that the business has been negatively impacted over the last two years because of the Coronavirus pandemic.

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The consolidation and merger & acquisition activity in the entertainment space has been happening across the globe and in India as this business requires scale, which is important, Bijli said.

On the benefits of the merger for the shareholders, Bijli said that the focus was primarily on the stakeholder who remains the consumer. In India, going outdoors for a movie is still the number one for of entertainment and that was getting impacted, he further said.

“We believe that if we come together, we will be able to ensure that we continue the momentum of building more screens,” he said.

Over the last two years, people were watching the movies at their homes, the PVR CMD said. The biggest rationale behind the merger was to bring back the momentum in the exhibition sector and all stakeholders will benefit from it be it real estate developers, government - whose revenues were hit or the consumer.

Coming of both brands with same vision will benefit the industry, Bijli said.

Meanwhile, Siddharth Jain, Board Member of Inox Leisure called the coming of two “iconic brands” together, a big news for the sector, which has been hit by the pandemic. Echoing similar sentiments, Jain said that the sector was lacking any growth during this period.

Both companies had to raise money and dilute stakes and now with enough funds, it was time to restart the investment cycle, he further said.

The entire focus on synergies will now be on growth synergies apart from revenue/cost synergies with a stronger balance sheet.             

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The merger of PVR and Inox Leisure has been approved by the boards of the two companies.

Shares of PVR were trading at Rs 1880.55 on the NSE at around 1:20 pm and were up over 3 per cent from the Friday closing price. Meanwhile, were trading at Rs 521.30 up 11 per cent around the same time.