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MUMBAI: Leading multiplex operator Inox Leisure Limited is acquiring
Calcutta Cinema Private Limited (CCPL) in an all-share-swap deal.
This will allow Inox to get a firm foothold in West Bengal, adding
up to its presence in Kolkata.
CCPL, which runs its business under the brand 89 Cinemas, plans
to commence its second three-screen multiplex at Durgapur in West
Bengal within 15 days. The company also runs a four-screen multiplex
at Swabhumi in Kolkata.
The two companies are in the process of appointing an independent
valuer. "We have agreed that the valuation will be on the basis
of a discounted cash flow model over five years. CCPL is merging
its operations with Inox," says Inox Leisure Limited director
Deepak Asher.
CCPL will have 8-10 properties over the next two years. "We will
be able to enhance our pan-India presence in movie exhibition by gaining
a strong foothold in West Bengal," says Asher. Inox presently
operates two multiplexes in Kolkatta (Elgin Road and Salt Lake) and
one in Darjeeling (Laden La Road).
Inox
also plans to open new multiplexes in Diamond City, Jessore Road with five screens
and at Kharagpur with four screens. The agreement with CCPL will take Inox’s
tally of multiplexes in West Bengal and Assam up to 13.In addition, CCPL has tied
up properties for building and operating six other multiplexes in West Bengal
and Assam. CCPL also has an understanding with Bengal Ambuja Housing Development
Limited (Bengal Ambuja) – a leading real estate developer in East India –
which gives CCPL preferential access as the preferred multiplex operator to all
properties being developed by Bengal Ambuja.
According to the press release, Inox also plans to expand its network
with new multiplexes in Hyderabad, Chennai, Jodhpur, Lucknow, Raipur,
Kolkata and Bangalore. In addition, Inox also has a strategic
alliance with the Pantaloon Group of Companies which provides it
with preferential access, as a multiplex operator, to all real estate
developments which the Pantaloon Group of Companies and funds managed
by it, are developing or otherwise associated with.
“89 Cinemas is an emerging multiplex chain with a strong regional
focus in Eastern India. The proposed merger will enable Inox to
build a very strong presence in the region and the inorganic growth
opportunity will create great value for Inox shareholders,”
Asher says.
CCPL CEO Debashis Ghosal commented, “We believe that the proposed
merger with Inox – India’s most profitable multiplex chain
– will create tremendous value for CCPL shareholders, enabling
them to partake in the value creation by Inox, as well as enable
Inox to build a formidable presence in Eastern India”.
The proposed merger is subject to due diligence, final approval
by Shareholders, Creditors and the High Court. Enam Financial Consultants
Pvt. Ltd. is acting as Advisor to this Transaction., “We are
delighted to have acted as Advisors to this transaction. We think
the proposed merger is a great fit with Inox’s national footprint
and 89 Cinemas strength in the eastern region. The proposed merger
perhaps marks the beginning of the consolidation phase in the multiplex
industry,” says Salil Pitale of Enam
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