NCLT Sanctions Merger Scheme between PVR and Inox Leisure

NCLT Sanctions Merger Scheme between PVR and Inox Leisure

The National Company Law Tribunal (in short NCLT) Mumbai bench approved the scheme of arrangement between multiplex chains between Priya Village Roadshow Limited (in short PVR) and Inox Leisure Limited. The official written order is still yet to be published in the next few days.

"We would like to inform you that Hon'ble NCLT, Mumbai Bench, has allowed the Proposed Scheme today i.e., 12th January 2023. The copy of the detailed order is awaited and the same shall be disclosed to the Stock Exchange as and when received by the Company," PVR said in a filling to the Bombay Stock Exchange (in short BSE).

The two companies will file the detailed order copy with the regulatory authorities like Registrar of Companies (in short RoC) and stock exchanges, once the NCLT issues the same. The allotment of shares is expected to be completed in the next few weeks.

On 27 March, 2022, PVR and INOX Leisure had announced a merger deal-scheme to create the largest multiplex chain in the country with a network of more than 1,500 screens.

PVR and Inox Leisure had moved the NCLT to seek the tribunal's approval for the proposed merger between the cinema chains.

The merger was subject to approvals from the NCLT and stock exchanges regulator- Securities and Exchange Board of India (in short SEBI), as well as by the shareholders.

On 15 December, 2022, the NCLT had posted the PVR-Inox merger application case for a final hearing on 12 January, 2023.

Previously, not-for-profit public policy and advocacy group Consumer Unity and Trust Society (in short CUTS) had moved National Company Law Appellate Tribunal (in short NCLAT) against the Competition Commission of India's (in short CCI) order on the PVR-Inox merger deal.

In September 2022, the CCI quashed CUTS' complaint against the merger between PVR and Inox Leisure. The competition watchdog stated that the apprehension of the likelihood of appreciable adverse effect on competition (in short AAEC) by an entity that is yet to take form cannot be held as a subject matter of inquiry/investigation.

The CCI had also stated that it would examine the order under the provisions of the Competition Act if, post-facto, any matter of abusive conduct comes up.

Under the all-stock amalgamation deal, Inox will merge with PVR. The promoters of Inox will become co-promoters in the merged entity along with the current promoters of PVR.

The combined entity will become the largest film exhibition company in India.

To create a film exhibition entity with a network of more than 1,500 screens, the two companies' boards, country's largest cinema chain operators, approved an all-stock merger scheme.

The share-swap ratio in the merger stands at three shares of PVR for ten shares of Inox, which means investors will get three shares of PVR for every ten INOX shares held.