Inox to acquire Calcutta Cine

CCPL, which runs its business under the brand 89 Cinemas, plans to commence its second three-screen multiplex at Durgapur in West Bengal within 15 days. The company also runs a four-screen multiplex at Swabhumi in Kolkata.

The two companies are in the process of appointing an independent valuer. “We have agreed that the valuation will be on the basis of a discounted cash flow model over five years. CCPL is merging its operations with Inox,” says Inox Leisure Limited director Deepak Asher.
CCPL will have 8 to 10 properties over the next two years. “We will be able to enhance our pan-India presence in movie exhibition by gaining a strong foothold in West Bengal,” says Asher. Inox presently operates two multiplexes in Kolkatta (Elgin Road and Salt Lake) and one in Darjeeling (Laden La Road).

Inox also plans to open new multiplexes in Diamond City, Jessore Road with five screens and at Kharagpur with four screens. The agreement with CCPL will take Inox’s tally of multiplexes in West Bengal and Assam up to 13.

In addition, CCPL has tied up properties for building and operating six other multiplexes in West Bengal and Assam. CCPL also has an understanding with Bengal Ambuja Housing Development Limited (Bengal Ambuja) – a leading real estate developer in East India – which gives CCPL preferential access as the preferred multiplex operator to all properties being developed by Bengal Ambuja.

According to the press release, Inox also plans to expand its network with new multiplexes in Hyderabad, Chennai, Jodhpur, Lucknow, Raipur, Kolkata and Bangalore. In addition, Inox also has a strategic alliance with the Pantaloon Group of Companies which provides it with preferential access, as a multiplex operator, to all real estate developments which the Pantaloon Group of Companies and funds managed by it, are developing or otherwise associated with.

“89 Cinemas is an emerging multiplex chain with a strong regional focus in Eastern India. The proposed merger will enable Inox to build a very strong presence in the region and the inorganic growth opportunity will create great value for Inox shareholders,” Asher says.

CCPL CEO Debashis Ghosal commented, “We believe that the proposed merger with Inox – India’s most profitable multiplex chain – will create tremendous value for CCPL shareholders, enabling them to partake in the value creation by Inox, as well as enable Inox to build a formidable presence in Eastern India”.

The proposed merger is subject to due diligence, final approval by Shareholders, Creditors and the High Court. Enam Financial Consultants Pvt. Ltd. is acting as Advisor to this Transaction., “We are delighted to have acted as Advisors to this transaction. We think the proposed merger is a great fit with Inox’s national footprint and 89 Cinemas strength in the eastern region. The proposed merger perhaps marks the beginning of the consolidation phase in the multiplex industry,” says Salil Pitale of Enam.