PVR Buys ICICI Venture, JPMorgan PE’s Stake In Unit

07 July, 2011

Film entertainment company PVR Ltd has acquired the stake held by private equity investors ICICI Venture and JPMorgan in its film production and distribution subsidiary PVR Pictures Ltd. According to a company statement, it has acquired the entire 40 per cent stake held by JPMorgan Mauritius Holdings IV and India Advantage Fund V in PVR Pictures Ltd, thus making it a wholly owned subsidiary.

The development comes as Ajay Bijli-promoted PVR is focusing more on its cinema exhibition business, instead of film production.

ICICI Venture and JPMorgan Special Opportunities Group had invested Rs 120 crore in PVR Pictures in June, 2008. Both investors had put in Rs 60 crore each in the company subsidiary. The investors seem to be taking a haircut on the transaction, as PVR CFO told CNBC TV 18 that the stake was acquired for Rs 60 crore.

ICICI Venture had originally invested in PVR Ltd in 2003 and exited in 2007, making over 4x. In 2008, ICICI Venture bought into the company again and currently holds 7.45 per cent stake.

PVR Picture had initially tasted success, producing movies like Taare Zameen Par and Jaane Tu Ya Jaane Na. But some of its recent bets like Khelein Hum Jee Jaan Se did not do well at the box office. It currently has only one project – Dibakar Banerjee’s Shanghai. PVR Pictures also distributes Bollywood and Hollywood movies.

“Considering the losses in PVR pictures, the company decided to restrict their operations in movie production segment and concentrate only on the core business of movie exhibition. This step by the management is a positive trigger as movie production is a hit-and-miss game. Instead of locking higher capital in this segment, the company can invest in more profitable movie exhibition and gaming businesses,” said KRChoksey in a recent report.

PVR reported 36 per cent increase in revenues for FY11 at Rs 461 crore, with net profit increasing up to eight times to Rs 8 crore. However, PVR’s movie production and distribution business reported revenues of Rs 74.89 crore, with a loss Rs 20.61 crore in FY11. PVR currently has 146 screens at 34 locations across 19 cities.

The share price of PVR Ltd was trading at Rs 104.2 per scrip, marginally up 0.68 per cent on Wednesday, or July 6.

PVR Ltd has recently sold and simultaneously leased back its multiplex property at Phoenix Mills, Mumbai, in a deal worth Rs 100 crore with JM Financial’s realty fund.


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PVR Buys ICICI Venture, JPMorgan PE’s Stake In Unit

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