Multiplex operators PVR and Inox said on Tuesday they have approval from the Securities and Exchange Board of India (SEBI) for their merger, clearing an important step in the regulatory process.
The two companies had announced in March a merger to create India’s largest multiplex chain with a network of more than 1,500 screens. As per the agreement, Inox would merge with PVR in a share swap ratio of 3 shares (of PVR) for every 10 shares of Inox.
“The amalgamation is subject to the approval of the shareholders of PVR and Inox respectively, stock exchanges, SEBI, and such other regulatory approvals as may be required. Post the merger, the promoters of Inox will become co-promoters in the merged entity, along with the existing promoters of PVR,” said the two companies in March.
PVR promoters will have a 10.62 per cent stake in the combined entity. Inox promoters will have a 16.66 per cent stake, they said.
Analysts expect the merger process to be completed in 2-3 quarters following the SEBI approval.
When the merger comes into effect, the board of the combined company will be reconstituted with a total board strength of 10 members. The promoter families of PVR and Inox will have equal representation on the board with two seats each.
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