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| DLF to take a call soon on selling DT Cinemas to PVR |
| Press Trust of India / New Delhi Sep 08, 2009, 18:58 IST |
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Realty major DLF is soon expected to take a call on selling its DT Cinemas to PVR Cinemas and is believed to be discussing various options, including retaining a minority stake in case of merging its multiplex business with the latter.
PVR Cinemas is believed to be leading the list of suitors for DT Cinemas and the two companies have discussed various options, including the possibility of a 'no-cash' deal under which DLF could retain below 15 per cent stake in the merged entity, industry sources said.
Industry sources said as of now the most plausible option looks like PVR's buying all the 26 DT screens from DLF, and instead of cash give the realty major 14.99 per cent stake in the business, although other options are still being considered.
"No-cash deal is certainly an option, but the two may also end up working out a deal around some kind of leasing arrangement," said a source familiar with the discussions.
"On the outer, if the deal goes through, it will be done within a few weeks," he added.
The two parties are also looking at options like leasing arrangement, the sources added.
DLF is expected to take a call on the move within a few weeks, said a source familiar with the discussions.
When contacted, spokespersons at both the companies declined to confirm or deny the discussions, and said they would not comment on market speculations. On June 30, in a BSE filing, PVR had termed reports on acquiring DLF's multiplex business as baseless.
According to industry sources, discussions are taking place against the backdrop of impending consolidation in the cinema screens business, and a host of industry players, whose names could not be confirmed, are eyeing DT Cinemas, owned by the country's realty major DLF.
PVR, which has 108 screens in 26 cities is looking at growing organically as well as through acquisitions.
Over the next 18 months or so, the company is slated to add about 80 screens, of which 35-40 new screens are expected this fiscal at a cost of around Rs 80 crore.
As for DLF, sources said DT Cinemas were intended to attract footfalls to the company's malls and have fulfilled that purpose over the past few years, and managing and operating cinemas is not its competence area.
For debt-laden DLF, exiting DT screens business will be in line with its stated objective of focusing only on core business of developing residential and commercial property.
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