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MUMBAI: Adlabs
Films Ltd. has entered into an agreement to acquire the cinema
exhibition business of Rave Entertainment, a move which will
give the Reliance Anil Dhirubhai Ambani Group company a presence
in the lucrative Delhi-UP territory.
Rave
Entertainment, a joint venture between Jagran and the Kothari
Group, has an operational multiplex in Kanpur and six more projects
are under implementation in NCR, Uttar Pradesh, Punjab and Haryana.
With this agreement, Adlabs will add a further 23 screens.
Adlabs already has 62 screens and multiplexes are soon to come
up in Ahmedabad, Hyderabad and Pune. "This acquisition
by itself would contribute to an increase in the company's multiplex
presence by five properties (17 screens) within the next four
months," Adlabs said in a release.
Rave
Entertainment owns and operates the brand 'Rave Cinemas' at
Kanpur and has entered into license arrangements for cinemas
at retail locations in Noida and other centers in UP, Punjab
and Haryana. Five of the seven properties are also entitled
to entertainment tax exemptions.
The Delhi-UP territory contributes a sizeable 23 per cent
to the all-India box office. Says Adlabs Films chairman and
managing director Manmohan Shetty, "Rave's properties
are well managed and the projects under implementation are
in carefully chosen strategic locations. Coupled with our
own aggressive growth path, we are well on our way to becoming
the market leader by July 2007. By end of March 2008, we will
have a presence in 70 cities, spread over all significant
film territories that contribute over 80 per cent to the domestic
box-office collections."
The
license terms between Adlabs and the promoters of Rave are
subject to confidentiality provisions. The transaction, involving
demerger of Rave's other businesses and obtaining of rights
to operate properties, is expected to take up to six months.
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