Citigroup VC favourite for Pyramid Saimira stake

Private equity major Citigroup Venture Capital (CVC) has emerged as the front-runner for acquiring stake in Pyramid Saimira Theatres (PSTL) and its subsidiary Pyramid Saimira Productions (PSPL) for around $100 million (around Rs 400 crore). The companies are expected to make an announcement by  month-end.

Other global financial majors like Caryle Capital, ABN Amro and Grant Thornton are also in talks to acquire a 14.9% stake in PSTL and 26% in PSPL.

According to sources close to the development, a 45-day due diligence by CVC is in its final stages, on completion of which the companies are expected to announce the deal.

When contacted, PSTL director Nirmal Kotecha declined to comment on the development. He, however, admitted that that the group was in talks with five-six private equity majors for offloading stake.

PSTL was looking at raising funds of around $150-200 million for its acquisition and expansion plans.

According to Kotecha, the company had bid for Hoyts, the Australian chain of multiplexes owned by the Kerry Packer Group. The company is in the final laps of the acquisition that would cost it around A$450 million (around $250 million).

Moreover, it is also expanding presence in the country to around 2,000 screens by 2010 from the 482 screens at present. The group, which produced 36 movies this year, is also looking at making over 100 movies next year.

PSTL operates in the southern states of Tamil Nadu, Andhra Pradesh, Karnataka and Kerala, while it also has operations in Malaysia, making it the first Indian company to foray into international film exhibition.