Reliance MediaWorks, a part of the Anil Ambani-led group, on Tuesday said it has concluded the sale of its multiplex business in a cash-cum-debt transfer deal, which will cut its parent company's liabilities by Rs.700 crore.
The group said the deal was the largest in for the sector in India, adding that talks were also on for another potential deal worth around Rs.200 crore for the sale of realty.
"The multiplex sale 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 the parent company, Reliance Capital, was quoted as saying in a regulatory filing with stock exchanges.
"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."
But the deal excludes real estate owned by Reliance MediaWorkd at IMAX Wadala and some of the other properties, which are intended to be separately monetised for an approximate value of Rs.200 crore, the company said.
Reliance MediaWorks had announced sale of its multiplex business to Carnival Cinemas in December last year and the transaction has now been closed upon receipt of all approvals.
At that time, the Reliance Group, which has some 250 "Big Cinemas" screens across India under its entertainment arm Reliance MediaWorks, had said it had the option of acquiring a minority stake in Carnival Cinemas at a discount, prior to an initial public offer by the company.
The chairman of hospitality-to-realty major Carnival Cinemas, Shrikant Bhasi, had said at the time of the deal that the group was targeting some 1,000 screens by 2017 and would work with Reliance Group in this regard.
"We are serious about exhibition business and moving in an organic way also. Carnival Cinemas will not only make their presence in Tier I but also lay emphasis for strong presence across Tier II and Tier III cities," Bhasi had said.
"We want to make cinemas synonymous to Carnival."
