The country’s largest multiplex chain operator PVR Ltd has entered into an agreement for the sale of its Anupam multiplex property located in south Delhi for a total consideration of Rs 52 crore ($8.5 million), the company disclosed on Friday. Simultaneously it has also entered into a long-term lease agreement with the buyer of the property to continue to operate the multiplex property.
PVR Anupam, India's first multiplex with four screens (few theaters set up in Ranchi and Amritsar way back in the 70s had more than one screens), opened to public in 1997 and is located at a prime location in Saket in New Delhi. The sale and lease back of the above property is in line with company's strategy to maintain an asset light business model, mentioned the statement.
The company said the sale and lease back of the above property would provide significant funds for expansion plans of the company and would release substantial capital to fund the future projects. The transaction will also enable the company to improve its ROCE and focus on the core operating business of operating and managing multiplex properties across the country on long-term lease basis.
In July this year, PVR added another existing theatre, the 3Cs property in Delhi, to its network through a lease and operate model. According to the company, this is one of the low capex ways to expand the business where the firm does not buy the property but makes a lease-and-operate arrangement with an existing theatre operator.
Talking to VCCircle then, Nitin Sood, CFO of the company had said, “This was like acquiring a property which is already built out and needs minor modifications. The capex we spend in such a deal is 20-25 per cent of what we actually spend in building a new theatre.”
Two years ago, then as the country’s second largest cinema chain operator, PVR had sold and simultaneously leased back its multiplex property at Phoenix Mills in Lower Parel, Mumbai, in a deal worth Rs 100 crore. The property was sold to Infinite India Investment Management, a 50:50 joint venture between JM Financial Group and SRS Fund.