Carnival in talks to raise Rs 300 cr, set to acquire 215 screens

South India-based Carnival Cinemas is in talks with a private equity fund in Singapore to raise Rs 250-300 crore for funding acquisition plans.

Carnival, which acquired HDIL's multiplex chain Broadway Cinema for Rs 110 crore last month, plans to add 300 multiplex screens by 2015, mainly through acquisitions route.

Once the deal is done, the private equity fund  will acquire about 25 per cent stake in Carnival's multiplex arm, Carnival Films.

According to people in the know, Carnival is in advanced discussions with three multiplex operators, one of which is based in South India and the other two have a nationwide presence. If the talks succeed, Carnival will add 215  screens to its current tally of 125. The deal size is around Rs 700 crore, of which the private equity fund will put up Rs 250-300 crore.

Carnival is likely to pay an average of Rs 3 crore per screen, according to sources. It is also among the contenders for Reliance Big Cinemas, which has been on the block for a while.

"We are in discussions with various private equity investors. However, nothing has materialised yet," Shrikant Bhasi, chairman of the Carnival group said but refused to elaborate.

"With more screens, multiplex groups can sign agreements with producers bypassing third-party distributors," Bhasi added.

Carnival's fundraising is in line with PVR's acquisition of Cinemax in 2012, which was backed by two  private equity firms, Multiples Alternate Asset Management and L Capital Asia. Multiples had pumped in Rs 153 crore while L Capital, an existing investor, invested another Rs 82 crore for PVR's Rs 395-crore Cinemax buyout. L Capital holds 15 per cent in PVR and Multiples 13.3 per cent.

Indian multiplex operators are consolidating since 2012. The latest acquisition took place in July, when INOX Leisure acquired New Delhi-headquartered Satyam Cineplexes for Rs 182 crore. Both PVR and INOX are learnt to be in race for Big Cinemas.

In 2009 PVR had announced it would acquire DLF's DT Cinemas in a cash-cum-equity swap for Rs 60 crore. The acquisition got delayed and PVR called it off.