The sales proceeds will be used to reduce Reliance Capital’s leverage by approximately Rs 700 crore, through a combination of transfer of debt of RMW and infusion of cash proceeds
BestMediaInfo Bureau | Mumbai | August 5, 2015
Reliance MediaWorks (RMW), a part of Reliance Group, has completed the transaction for sale of its multiplexes business to Carnival Cinemas, in the largest ever deal in the sector in India.
The entire sales proceeds for sale of multiplex business have been duly received by RMW from Carnival Cinemas and will be used to reduce Reliance Capital’s leverage by approximately Rs 700 crore, through a combination of transfer of debt of RMW and infusion of cash proceeds.
Sam Ghosh, Executive Director, Reliance Capital, said, “We are happy to announce closing of this transaction with Carnival Group, which will reduce our overall leverage by approx Rs 700 crore. This will lower our debt equity ratio to a conservative 1.75:1, amongst the lowest in the financial services sector in India.”
He further said, “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.”
RMW 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. The deal excludes real estate owned by RMW at IMAX Wadala and other properties, which are intended to be separately monetised for an approximate value of Rs 200 crore.
The deal makes Carnival Cinemas the third largest multiplex operator with nationwide presence and over 300 screens. As many as 88 cinemas (72 multiplexes and 16 single screen cinemas) operated by Reliance MediaWorks having 238 screens are now transferred to Carnival Cinemas.