PVR Ltd., India’s largest movie exhibitor, is seeking growth opportunities overseas after sealing a deal to acquire a local cinema chain.
The company’s “big focus” is to look at Saudi Arabia, while it’s also planning projects in Dubai, Chief Financial Officer Nitin Sood said in a telephone interview. PVR also expects to open a nine-screen multiplex in Sri Lanka’s capital Colombo at the beginning of the next financial year, he said.
The cinema chain operator, which counts private equity firm Warburg Pincus among its investors, is exploring setting up theaters abroad as it sees few opportunities for acquisitions in India after agreeing to buy SPI Cinemas Pvt. last month. While PVR is targeting to build new screens in India to take its total to 1,000 by the end of 2020, faster expansion may not be possible because of slow real estate development, according to Sood.
“In our business, the biggest opportunity is typically in markets which are opening up and Saudi Arabia is just opening up,” Sood said on August 31. And “in Sri Lanka there are no big ticket multiplexes, so that’s the reason we are looking at it,” he said.
In April, Saudi Arabia ended a ban on cinema by allowing the screening of global blockbuster “Black Panther.” This was the first movie screening in the country in more than 35 years as Crown Prince Mohammed bin Salman consolidates his power and tries to persuade the world that he is reshaping his country to be more open and modern.
PVR, which in July agreed to work with Dubai-based Al-Futtaim Private Co. on a feasibility study and subsequently forge a joint venture for projects in the region, will compete with companies including AMC Entertainment Holdings Inc., controlled by China’s Dalian Wanda. AMC plans to open 100 cinemas with Saudi Arabia’s Public Investment Fund.
The Indian operator, which currently has more than 700 screens, has grown through acquisitions including of DT Cinemas Ltd. and Cinemax India Ltd. That’s a path it will unlikely pursue as existing assets are very small and could also attract antitrust issues, according to Sood.