Reliance MediaWorks sells Big Cinemas to Carnival for Rs 700 cr | business | Hindustan Times
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Reliance MediaWorks sells Big Cinemas to Carnival for Rs 700 cr

business Updated: Dec 15, 2014 23:16 IST
HT Correspondent

In the biggest deal in India’s multiplex space, Anil Ambani-led Reliance MediaWorks has sold its Big Cinemas unit to Kochi-based Carnival Group for about Rs700 crore. The deal is expected to lower the debt of its financial services arm, Reliance Capital, by a similar amount.

The deal will make Carnival, the third-largest multiplex operator in India after PVR and INOX, with over 300 screens across the country.

The deal includes transfer of part of Reliance MediaWorks’s debt to Carnival. It, however, excludes Reliance MediaWorks’ real estate assets in Mumbai and some other properties that the company plans to sell separately for Rs200 crore.

Reliance Capital has been looking to reduce its current debt of about Rs6,000 crore. On November 26, the company had sold 9% stake in its asset management business to Japan’s Nippon Life for Rs657 crore.

“The deal to sell Big Cinemas business to Carnival is in furtherance of the stated objective of focusing purely on core financial services businesses, significantly reducing exposure to non-core investments in the media and entertainment sector and reducing overall debt,” Reliance Capital CEO Sam Ghosh said.

Terming the deal as expensive, analysts said it could be used as a model to guide future transactions of other large players such as PVR and Inox. “It will help Carnival as they have a readymade model and will now be able to operate on a larger scale,” an analyst with a Mumbai-based brokerage said.

“We are targeting to achieve 1,000 screens by 2017, and look forward to the continued support of the Reliance Group in our future growth,” Carnival chairman Shrikant Bhasi said.

Reliance Capital will retain an option to acquire a stake in the pre-initial public offering (IPO) stage whenever Carnival plans a public listing.