Faced with short-term liquidity crisis, Pyramid Saimira Theatre Ltd, the exhibition company, whose multiplexes operate 700 screens in India, has pulled out from Mumbai, other parts of Maharashtra and Delhi.
The company has also shut down unprofitable screens in Malaysia, and gone in for several cost-control measures.
PS Saminathan, chairman and managing director, Pyramid Saimira Group, told Hindustan Times that “Since the operations in northern and western areas were sub-optimal and were incurring cash losses, we decided to exit.”
The company’s liquidity crisis was triggered, among other factors, by the box-office failure of Tamil big-budget movie Kuselan, whose distribution rights it bought for over Rs 70 crore. “The movie did not do well and we lost close to Rs 40 crore”, said Saminathan.
The company’s woes increased in December, when the Income Tax department issued a bank attachment order against it for ‘non-payment of certain dues and treatement of certain items of expenses’.
Promoters Saminathan and Uma Saminathan had pledged a part of their shareholding in Pyramid for loans. Recently, institutional lenders sold these shares as the price of Pyramid shares fell sharply.