Sub: Outcome of board meeting held on 27 March 2022.
Ref:Disclosure under Regulation 30 of the Securities and ExchangeBoardofIndia
(ListingObligationsandDisclosureRequirements)Regulations, 2015, as amended, ("Listing Regulations") read with theSecurities and Exchange Board of India ("SEBI") circular dated 9
("Disclosure Circular"), as amended from time to time.
The Board of Directors ("Board") of PVR Limited ("Company" or "Transferee Company"), at their meeting held today (i.e.27 March 2022), after due deliberations, have considered and approved a scheme of amalgamation of INOXLeisure Limited ("Transferor Company") into and with the Company and theirrespective shareholders and creditors under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and other rules and regulationsframed thereunder ("Scheme"). The Board of the Company has also approved the execution of a merger co-operation agreement between the Transferor Company, the Transferee Company, GFL Limited, INOX Infrastructure Limited, Mr. Pavan Kumar Jain, Mr. Siddharth Jain, Mr. Ajay Bijli and Mr.Sanjeev Kumar ("Merger Co-operation Agreement") which sets out the manner of effecting the proposedamalgamation contemplated under the Scheme, the representations and warranties being given by each party and the rights and obligations of the respective parties.
The Scheme is subject to the receipt of applicable approvals, including approvalsfrom the respective jurisdictional Hon'ble National Company Law Tribunal, SEBI,BSE Limited and the National Stock Exchange of India Limited and such other approvals, permissions, and sanctions of regulatory and other authorities as may be necessary. The Appointed Date for the Scheme shall be the Effective Date of the Scheme (which shall be the date on which the last of the conditions precedent to effectiveness as set out in the Scheme are satisfied) or such other date that the Transferor Company and the Transferee Company may agree mutually, and is the date with effect from which the Scheme shall be operative.
In addition, the Board of the Company, after due deliberations, has considered andapproved the entering into a binding term sheet ("BTS") with the TransferorCompany, GFL Limited, INOX Infrastructure Limited, Mr. Pavan Kumar Jain, Mr.
Siddharth Jain, Mr. Ajay Bijli and Mr. Sanjeev Kumar (collectively, "Parties"), toestablish the inter-se rights amongst the Parties in the Transferee Company post the Scheme becoming effective (Effective Date being as prescribed under the Scheme).
The Scheme will be filed with the stock exchanges as per the applicable provisions of Regulation 37 of the SEBI Listing Regulations read with the SEBI circular dated 10 March 2017, bearing reference number CFD/DIL3/CIR/2017/21, as amended from time to time.
The information in connection with the Scheme, required to be furnished pursuant to Regulation 30 of the Listing Regulations read with the Disclosure Circular, is set out herein below:
Name of the entities forming part of theamalgamation/merger, details in brief such as, size,turnover etc.
1. As per the standalone audited financials for the quarter and year ended 31 March 2021, INOX Leisure Limited, the Transferor Company has total assets ofINR 3,784 crore, turnover of INR148 croreincluding other income of INR 42 crore and net worth of INR 633 crore. Further, as per the standalone limited reviewfinancials for the quarter and six monthsperiod ended 30 September 2021, the Transferor Company has total assets ofINR 3,892 crore, turnover of INR 79 crore including other income of INR 9 crore and net worth of INR 720 crore. Equity sharesof the Transferor Company are listed on BSE and NSE.
2. As per the standalone audited financialsfor the quarter and year ended 31 March 2021, PVR Limited, the Transferee Company has total assets of INR 7,450crore, turnover of INR 698 crore includingother income of 472 crore and net worth of INR 1,840 crore. Further, as per the standalone limited review financials forthe quarter and six months period ended30 September 2021, the Transferee Company has total assets of INR 7,348crore, turnover of INR 345 crore including other income of 190 crore (includes other income) crore and net worth of INR 1,485crore. Equity shares of the Transferee Company are listed on BSE and NSE.
Whether the transactionwould fall within related party transactions? If yes,
whether the same is done at"arms' length"
Transferee Company are not related parties, the amalgamation of the Transferor Company with the Transferee Company will not fallwithin related party transactions.
In any event, the transactions contemplated inthe Scheme are being undertaken at arms'length.
Area of business of the entities
1. The Transferor Company is a public listedcompany engaged in cinema exhibition,related food & beverages and allied activities. The objects clause of the memorandum of association of the Transferor Company authorises the Transferor Company to carry on its business.
2. The Transferee Company is a public listed company engaged in cinema exhibition,movie distribution, related food &beverages and allied activities. The objects clause of the memorandum of association of the Transferee Company authorises theTransferee Company to carry on its business.
Rationale amalgamation/ mergerfor
The proposed amalgamation would be in thebest interest of the Transferee Company and the Transferor Company and their respective shareholders, employees, creditors and other stakeholders as the proposed amalgamationwill yield advantages as set out,inter aliabelow:
(a) consolidation for the sustainability of the business;
(b) create value for stakeholders includingrespective shareholders, customers, lenders and employees as the combined business would benefit from increased scale, innovations in technology and expanded reach with increased growth opportunities, higher cross selling opportunities to a larger base ofcustomers, improvement in productivityand operational efficiencies, amongst others;
(c) accelerate growth and expand into Tier-2 and Tier-3 cities and take modernmultiplex experience across more statesand towns across India;
(d) better administration and costoptimization (including optimization in
administrative and other common costsby bulk negotiations);
(e) pooling of resources and creating bettersynergies;
(f) provide material realisable cost and revenue synergies for the benefit of the Parties; and
(g) optimal utilisation of resources and economies of scale resulting in improved efficiencies especially in the wake of Covid-19, which has impacted the film exhibition industry at large. The growth of digital OTT platforms due to higher mobile internet penetration, low cost of internet data, ease of access, multi-homing, free content and lowsubscription charges has already begunto have an impact and will continue to impose significant pressures on thetheatrical business. The film business isgoing through a rapid transformational change due to advent of technology and hence, in order to compete effectively, it has become imperative to consolidate for the long term sustainability of the business.
In case of cashconsideration - amount or otherwise share exchangeratio
The share exchange ratio for theamalgamation of the Transferor Company with the Transferee Company shall be 3 (Three) fully paid up equity shares of the TransfereeCompany for every 10 (Ten) fully paid up equity shares of Transferor Company.
The share exchange ratio has been arrived at based on the joint valuation report dated 27March 2022 issued by M/s. SSPA & Co.,Chartered Accountants (Registered Valuer) and Drushti Desai, Registered Valuer, Partnerat Bansi S. Mehta & Co., supported by a fairness opinion dated 27 March 2022 submitted by Axis Capital Limited, anindependent SEBI registered merchantbanker.
Brief details of change inshareholding pattern (if any)of the listed entity
Upon the Scheme becoming effective, theTransferee Company will issue equity shares as mentioned in point (e) above to the equity shareholders of the Transferor Company as onthe "record date" and all the equity shares ofthe Transferor Company shall stand extinguished.
The information in connection with the Merger Co-operation Agreement, is set out herein below:
Name(s) of parties with whom the agreement is entered
The Merger Co-Operation Agreement has been entered into amongst Transferor Company, GFL Limited, INOX Infrastructure Limited, Mr. Pavan Kumar Jain, Mr. Siddharth Jain, Transferee Company, Mr. Ajay Bijli and Mr. Sanjeev Kumar.
Purpose of agreemententeringintothe
The Merger Co-Operation Agreement sets out the manner of effecting the proposed amalgamation contemplated under the Scheme, the representations and warranties being given by each party and the rights and obligations of the respective parties.
Shareholding, if any, in the entity with whom the agreement is executed
Transferor Company, GFL Limited, INOX Infrastructure Limited, Mr. Pavan Kumar Jain and Mr. Siddharth Jain do not hold any equity shares in the Transferee Company. In addition, the Transferee Company and its existing promoters do not hold any equity shares in the Transferor Company.
Significant terms of the agreement (in brief) special rights like right to appoint directors, first right to share subscription in case of issuance of shares, right to restrict any change in capital structure etc.;
The Merger Co-Operation Agreement,inter alia, sets out the manner of effecting the proposed amalgamation contemplated under the Scheme, the representations and warranties being given by each party and the rights and obligations of the respective parties.
Upon the Scheme becoming effective, and in addition to the existing promoters of the Transferee Company, GFL Limited and INOX Infrastructure Limited, will beclassified as the 'Promoters' of theTransferee Company
Upon the effectiveness of the proposed amalgamation, Mr. Pavan Kumar Jain and Mr. Siddharth Jain will get certain special management rights over the Transferee Company, including their appointment as a director of the Transferee Company and accordingly, both will be classified as'Promoters'/ 'Promoter Group' of theTransferee Company upon the Scheme
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