PVR board approves right issue

Multiplex chain operator PVR’s share price wobbled this morning before making a strong comeback on the bourses. Initially, the counter dipped nearly 2% as investor sentiment turned sour on learning about the company’s board approving rights issue. The share price has since recovered to quote 1% higher at Rs 1,068 on NSE. The ongoing unlocking process in the country has brightened the chances multiplex operators resuming operations soon, helped calm investor nerves.
PVR share price has recovered nearly 50% from its 52-week low hit late March this year.
As far as rights issue is concerned, PVR seems determined to seize the opportunities offered by prevailing situations.
The company board approved the issue of equity shares of face value of Rs 10 each by way of a rights issue to the eligible shareholders for an amount aggregating up to Rs 30,000 lakh.
The board has fixed the issue price at Rs 784 per equity share (including a premium of Rs 774 per equity share over face value of Rs 10 per equity share), which offers 26.5% discount to current market price.
The company will allot seven fully paid-up equity shares for every 94 equity share held as on the record date, which is July 10, 2020. The issue will open on July 17 and close on July 31.
If the shareholding of any of the eligible equity shareholders is less than 13 equity shares or not in the multiple of 13 equity shares, the fractional entitlement of such eligible equity shareholders shall be ignored for the computation of the rights entitlement.

However, the eligible equity shareholders whose fractional entitlements are being ignored will be given preferential consideration for the allotment of one additional rights equity share each if they apply for additional rights equity shares over and above their rights entitlement.
Meanwhile, PVR’s financial performance for the fiscal fourth quarter reflected the COVID-19 induced lockdown impact on its operations from non-availability of movie watchers.

The company reported a consolidated net loss of Rs 74.61 crore for the fourth quarter ended March 2020.
Due to the coronavirus outbreak in India, theatres were the first to shut shop and had stopped operations since the second week of March which led to zero box office collections.
This is why PVR’s revenue from operations during the quarter under review stood at Rs 645.13 crore which was was Rs 837.63 crore in the corresponding quarter a year ago.

The company posted a net profit of Rs 46.75 crore in the January-March quarter a year ago.
Beginning March 11, 2020, the company started closing its screens in accordance with the order passed by various regulatory authorities and within a few days most of our cinemas across the country were shut down.
Besides, PVR has taken one-time write off of perishable inventory of Rs 1.83 crore in March 2020, on account of spoilage due to closure of cinemas pursuant to COVID-19.

PVR’s total expenses was at Rs 731.84 crore in fourth quarter of 2019-20 as against Rs 771.27 crore a year ago.
Revenue from movie exhibitions was at Rs 628.88 crore and Rs 29.89 crore from others which includes movie production, distribution and gaming.
Meanwhile, PVR’s results for year ended March 31, 2020, are not comparable with year ended March 31, 2019, ‘on account of acquisition of SPI Cinemas’.

Currently, PVR operates 845 screens in 176 properties across 71 cities.
For the fiscal year 2019-20, PVR’s net profit was at Rs 26.85 crore. It was Rs 189.40 crore in 2018-19.
Its revenue from operations in FY20 was Rs 3,414.44 crore. It stood at Rs 3,085.56 crore in FY19.

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