Asian Venture Capital Journal 3 August 2012
L Capital, the private equity arm of luxury group LVMH, will invest just under INR1.1 billion ($19.4 million) in cinema and entertainment company PVR for a 10% stake. As part of the deal, L Capital will set up a joint venture with the Indian firm that will focus on in-mall entertainment, gaming, food and leisure.
According to a filing with the National Stock Exchange of India, the private equity unit’s Singapore subsidiary, L Capital Eco, will subscribe to 2.88 million shares in PVR at INR200 apiece for a total consideration of INR577 million. This represents a premium of around 8.7% on the company’s closing price Wednesday. The remaining INR501 million will be channeled into the joint venture, of which L Capital will own 44% to PVR’s 51%. A further 5% is earmarked for management stock options.
The joint venture, which is subject to approval by India’s Foreign Investment Promotion Board, will also control PVR’s existing bowling-alley business, PVR BluO Entertainment, itself a joint venture established in 2009 with Thailand’s Major Cineplex.