NCLT gives approval for merger of multiplex operators PVR and Inox

Detailed order expected in next few days; paves way for India's largest cinema chain

The National Company Law Tribunal (NCLT) on Thursday approved the merger of multiplex operators PVR and Inox, the two chains said in separate filings to the stock exchanges. 

“The National Company Law Tribunal (NCLT), Mumbai Bench, has allowed the proposed scheme of amalgamation between Inox Leisure and PVR today,” statements by the two companies read. They said the detailed order was awaited.

Advocates said it could take some more days for the detailed order to be made available. After that it would be filed with the Registrar of Companies and disclosed to the stock exchanges.

On Thursday the NCLT, Mumbai Bench, delivered a verbal order, wherein the merger ratio of three shares of PVR for 10 shares of Inox was approved, persons in the know said.

On March 27, 2022, PVR and Inox, the country’s largest and second-largest cinema chains, had announced that they proposed to come together, which would result in a network of over 1,500 screens. The proposal was subject to approvals from the NCLT, stock exchanges, the Securities and Exchange Board of India (Sebi), as well as shareholders and creditors.

While stock exchanges, Sebi, shareholders and creditors approved the proposal over the past few months, the NCLT’s approval was pending.

A non-profit organisation called CUTS had moved the Competition Commission of India (CCI) against the merger, and approached the National Company Law Appellate Tribunal (NCLAT) after its petition was dismissed by the CCI.

In a conversation with Business Standard last month, Siddharth Jain, director of the Inox group, said the NCLAT had listed the matter for February 9. “We hope that somewhere in the month of February next year (2023), the proposed merger should get done,” he said.

PVR is likely to issue shares to Inox shareholders in the next few weeks, after the NCLT’s detailed order is received, said persons in the know.

The combined entity will be named PVR Inox, with the branding of existing screens to continue as PVR and Inox. New halls opened after the merger will be branded as PVR Inox, the companies had said last year.

After the merger, the promoters of Inox will become co-promoters in the merged entity, along with the existing promoters of PVR. PVR promoters will have a 10.62 per cent stake, while Inox promoters will have a 16.66 per cent stake in the combined entity.

PVR’s Joint Managing Director Sanjeev Bijli said the combined entity would have 3,000 to 4,000 screens in five years. For this, the merged entity would tap newer cities, which were unserved and had huge potential, he said.

In particular, markets in the southern and eastern parts of the country would be on their radar to improve penetration, he said.