Big Cinemas sold to Carnival

Big cinemas is a division of Reliance MediaWorks Ltd and a member of Reliance ADA Group is a theatre chain with over 515 screens in India, US, Malaysia, and the Netherlands. As of July 2014, the company has 280 screens in India. The company accounts for 10% t0 15% of box office contributions of large movies.

On Monday, December 15, 2014, Anil Ambani led Reliance Group has sold its multiplex business to South India based Carnival Group in the largest ever deal in this space. The transaction will reduce Reliance Capital overall debt by Rs 700cr and is part of Reliance Capital’s strategy to exit minority investments. The deal will make Carnival the third largest multiplex operator with nationwide presence and over 300 screens.

The firms did not disclose the exact value of the deal. The deal stuck between Carnival Cinemas and Reliance MediaWorks, will exclude IMAX Wadala and some other properties worth Rs 200cr. Reliance capital is the parent firm of Reliance MediaWorks, which operates one of the largest cinema chains, under the brand ‘BIG CINEMAS’ with over 250 screens in India.

Carnival group is targeting to achieve 1000 screens by the year 2017. The transaction between the two will be completed within the current financial year. Reliance capital will retain an option to acquire a stake in pre-IPO stage at an appropriate discount whenever carnival goes a listing. Reliance capital had recently announced its plans to focus on core business and is in the process of encashing its minority investments. The company is in talks with 2-3 international investors to sell its 16 percent stake in leading travel portal Yatra.com for an estimated 500cr.