The Hindu Business Line : Inox to acquire `89 Cinemas'

Multiplexes major Inox Leisure Ltd has entered into a share-swap deal with Calcutta Cine Pvt Ltd (CCPL) — more popular as 89 Cinemas — for acquisition and merging its operations with Inox Leisure Ltd.

CCPL, a joint venture of the Bengal Ambuja Group and its associates and Consolidated Entertainment Pvt Ltd, runs its business under the `89 Cinemas' brand name and operates a four-screen multiplex at Swabhumi in Kolkata. CCPL is scheduled to roll out another three-screen multiplex in Durgapur within the next two weeks. The company has also firmed up plans to build and operate six more multiplexes in West Bengal and Assam, entailing investments of Rs 50 crore.

In addition, CCPL has an understanding with Bengal Ambuja Housing Development Ltd, whereby it will have access as the preferred multiplex operator at all properties being developed by Bengal Ambuja.

Takeover deal

According to Mr Deepak Asher, the Director of Inox Leisure Ltd, the share-swap deal envisages Inox's taking over of CCPL, the 89 Cinemas brand, the operational multiplex at Swabhumi, the properties under construction, the equipment and the manpower of CCPL.

In lieu of the purchase, Inox will issue preferential shares in the company to CCPL. Both parties have agreed to appoint "an independent valuer who will be an accounting firm or investment banker with a mandate on certain principles of valuation for 89 Cinemas and Inox. Depending upon the valuation, we will issue the preferential shares", Mr Asher said.

According to him, the valuation exercise is expected to be over within the next two weeks. "Apart from the valuation, we will conduct the legal and accounting due diligence. We expected the entire deal to be concluded by the middle of next month," he added .

Inox Leisure Ltd, which has a nationwide presence with 11 operational multiplexes and 41 screens in 10 cities, has also firmed up plans to set up new properties in the current fiscal at an estimated investment of Rs 60 crore, Mr Asher said.

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