Reliance MediaWorks completes sale of multiplex business to Carnival Group
04 August 2015
Reliance MediaWorks Ltd, a part of Anil Ambani-led Reliance Group, has completed the sale of its multiplexes business to Carnival Cinemas Ltd, in the largest ever deal in the sector in India.
Reliance MediaWorks, which operated cinema chains under the brand 'BIG Cinemas' with over 250 screens across the country, was owned by Reliance Capital.
Reliance MediaWorks said it has received the entire sales proceeds of the multiplex business from Carnival Cinemas, and that the proceeds will be used to reduce Reliance Capital's leverage by approx Rs700 crore, through a combination of transfer of debt of RMW and infusion of cash proceeds.
"We are happy to announce closing of this transaction with Carnival Group, which will reduce our overall leverage by approx Rs700 crore. This will lower our debt equity ratio to a conservative 1.75:1, amongst the lowest in the financial services sector in India,'' Sam Ghosh, executive director of Reliance Capital Ltd, stated.
''The transaction is in furtherance of Reliance Capital's stated objective of focusing purely on its core financial services businesses, significantly reducing exposure to non-core investments in the media and entertainment sector, and reducing overall debt," Ghosh added.
Reliance MediaWorks announced the sale of its multiplex business to Carnival Cinemas in December last year, and the transaction has now been closed upon receipt of all approvals.
The deal excludes real estate owned by RMW at IMAX Wadala and other properties, which are intended to be separately monetised for an approx value of Rs200 crore, the company stated.
With the deal, Carnival has emerged as the third-largest multiplex operator in the country with a nationwide presence and over 300 screens.