The Board of Directors of PVR Limited (PVR) and the Board of Directors of INOX Leisure Limited (INOX) have approved an all stock amalgamation of INOX with PVR.
The amalgamation is subject to approval of the shareholders of PVR and INOX respectively, stock exchanges, SEBI and such other regulatory approvals as may be required. Upon obtaining all approvals, when the merger becomes effective, INOX will merge with PVR. Shareholders of INOX will receive shares of PVR in exchange of shares in INOX at the approved share exchange (“swap”) ratio, the statement said.
Post the merger, the promoters of INOX will become co-promoters in the merged entity along with the existing promoters of PVR. Upon effectiveness of the scheme, the Board of Directors of the merged company would be re-constituted with total board strength of 10 members and both the promoter families having equal representation on the Board with 2 board seats each, the company said in its statement.
Ajay Bijli would be appointed as the Managing Director and Sanjeev Kumar would be appointed as the Executive Director. Pavan Kumar Jain would be appointed as the Non- Executive Chairman of the Board. Siddharth Jain would be appointed as Non-Executive Non-Independent Director in the combined entity.
The combined entity will be named as PVR INOX Limited with branding of existing screens to continue as PVR and INOX respectively. New cinemas opened post the merger will be branded as PVR INOX, it said.
SSPA & Co, Chartered Accountants and Drushti Desai, Registered Valuer, Partner at Bansi S. Mehta & Co., the Independent Valuers appointed by PVR and INOX respectively, have recommended a share exchange ratio, which has been accepted by the respective Boards.
Axis Capital Limited provided a Fairness Opinion to PVR on the share exchange ratio while Ernst & Young Merchant Banking Services LLP provided the Fairness Opinion to INOX. Accordingly, INOX shareholders will receive 3 shares in PVR for 10 shares of INOX.
Post the merger, PVR Promoters will have 10.62% stake while INOX Promoters will have 16.66% stake in the combined entity.
Commenting on the announcement, Siddharth Jain, Director – INOX Leisure Ltd said, “Coming together of two iconic cinema brands, which are driven by passion, is certainly the most historic moment in the Indian cinema exhibition industry. Both companies have set high service benchmarks in an endeavor to offer the best cinema experience in the world, to the most passionate moviegoers, and would continue to do so as a unified entity. As we head into the industry’s revival amidst headwinds, this decisive partnership would bring in enhanced productivity through scale, a deeper reach in newer markets and numerous cost optimization opportunities, and continue to delight cinema fans with world-class experiences and landmark innovations.”
Commenting on the announcement, Ajay Bijli, Chairman and Managing Director of PVR said – “This is a momentous occasion that brings together two companies with significantly complementary strengths. The partnership of these two brands will put consumer at the center of its vision and deliver an unparalleled movie going experience to them. The film exhibition sector has been one of the worst impacted sectors on account of the pandemic and creating scale to achieve efficiencies is critical for the long-term survival of the business and fight the onslaught of digital OTT platforms.”
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