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PVR begins audit of Cinemax properties, no decision yet on branding

PVR, the multiplexes and film distribution major, has begun a detailed audit of the properties of Cinemax, which it acquired recently in a Rs 543 crore takeover propelling PVR to pole position in India's multiplexes stakes.

The audit, which began recently, would take a couple of months, after which PVR would take detailed decisions on integration and branding.

Firstpost.com

PVR Managing Director Ajay Bijli told Entrepreneur magazine that teams from PVR were currently engaged in the detailed audit of the properties and examining them. Firstpost.com

PVR announced its third quarter results on 30 January, providing consolidated results which showed the company had grown earnings before interest, taxation, depreciation and amortisation (EBITDA) by a healthy 34 percent, while consolidated revenues grew 43 percent at Rs 202.44 crore.

PVR Managing Director Ajay Bijli told Entrepreneur magazine that teams from PVR were currently engaged in the detailed audit of the properties and examining them.

"We now have to focus on economies of scale and profit maximization from sponsorships, ticket sales and higher food and beverages income," Bijli said.

PVR Joint Managing Director Sanjeev Kumar Bijli said that maintaining the numbers and profitability at Cinemax was the top priority for PVR, post-acquisition.

The two entities would also share best practices for the benefit of the common entity.

Following the bold acquisition which also saw PVR being backed by private equity major L Capital and Multiples Alternate Asset Management of Renuka Ramnath - both of whom will end up with a 15.8 percent stake each in PVR - the combine will now have a strong grip on the Indian multiplexes circuit, with 351 screens in 85 cinemas across 16 states.

While there are reports of rival INOX Leisure, which earlier acquired the Fame multiplexes chain, also being interested in Fun Cinemas to increase its footprint, Ajay Bijli, however, made it clear he does not want to look at any more acquisitions right now.

"Not that Fun is not a transparent company, but we prefer listed companies. For now, our focus is on integration. We are not looking at anything else right now. We have lots of projects under construction. We don't want to bite off more than we can chew," said Bijli.

The PVR gameplan is to reach about 500 screens over the next 12-18 months, including the PVR and Cinemax pipeline of projects.

Mindful of the fact that the multiplexes stakes can change anytime if another rival consolidates, Bijli said he would now focus on executing the ambitious organic rollout plan and integrating PVR and Cinemax seamlessly to gain scale.

On whether the Cinemax properties would now sport the PVR brand, Bijli said no decision had yet been taken. Though the Cinemax brand has also been acquired, any decision would be taken only after the audit.

Currently, the PVR management is talking to the Cinemax team to ensure the two entities are on the same page and assuring the Cinemax employees that there will be no rude shocks for them.

Distribution piece

On the distribution side too, PVR Pictures, the 100 percent subsidiary of PVR, has lined up a slew of important Hollywood releases from the fast-growing independent studios. Midnight's Children, Zero Dark Thirty and The Reluctant Fundamentalist are some big international releases coming up from the PVR Pictures stable, and Kamal Gianchandani, Group President, PVR Pictures, said the aim was to become exclusive distributors for the rapidly growing independent Hollywood studios.

PVR Pictures is currently the largest independent distributor for Hollywood in India . The distribution piece is expected to add Rs 35 crore or so to the PVR topline in FY13, and about 35-40 important Hollywood releases are lined up over the next two to three years.

The PVR stock closed at Rs 261.95 on 31 January, down 4.31 percent in a weak market.

(Read all the details about Ajay Bijli and PVR's journey and the Cinemax acquisition in the latest issue of Entrepreneur. Now on stands)

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