89 Cinemas to merge into INOX Leisure Ltd

Company News

Mumbai, June 26

Inox Leisure Limited (INOX), India’s premier multiplex chain, has entered into an all-share-swap deal with Calcutta Cinema Private Limited (CCPL) for acquiring CCPL and merging its operations with INOX Leisure Limited.

CCPL, which runs its business under the “89 Cinemas” brand name, operates a 4-screen multiplex at Swabhumi in Kolkata and is likely to commence its second 3-screen multiplex at Durgapur in West Bengal in around a fortnight. In addition, CCPL has tied up properties for building and operating 6 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.

INOX already has a nation-wide presence with 11 operational multiplexes, and a total of 41 screens, across 10 cities - Mumbai, Pune, Vadodara, Goa, Jaipur, Kolkata, Bangalore, Indore, Darjeeling and Kota. INOX, in the six years of its existence, has emerged as one of the fastest growing, and most profitable, multiplex chains in the country. INOX was awarded the ‘Best Entertainment Retailer’ at the ICICI Retail Excellence Awards, 2005. INOX 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.

With this proposed merger, INOX will further enhance its pan-India presence in movie exhibition, and build a strong presence in East India. INOX presently operates 2 multiplexes in Kolkatta (Elgin Road & Salt Lake) and 1 in Darjeeling (Laden La Road). INOX plans to open new multiplexes in Diamond City, Jessore Road with 5 screens and at Kharagpur with 4 screens. The agreement with CCPL will take INOX’s tally of multiplexes in West Bengal & Assam up to 13.

Mr. Deepak Asher, Director, Inox Leisure Limited, while commenting on the proposed merger, said “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”.

Mr. Debashis Ghosal, CEO, CCPL 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. Mr Salil Pitale of Enam commented “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.”

Nayana Borthakur

INOX Leisure Ltd.

Cross Road 2, 2nd Floor

Opp. Bajaj Bhavan, Nariman Point

Mumbai - 400 021

Ph - 56588888 (O), 9820584824 (M)

Fax - 56364669

Email - nayana@inox.co.in