PVR Limited, on Monday after the market hours, informed the bourses about the rights issue worth Rs 300 crore, which was earlier, announced on June 08, 2020.
Taking measures to enhance the company's liquidity, the board of directors has authorised a rights issue of Rs 300 crore. The company has set the price for the rights issue at Rs 784 per share (almost at 25 per cent discount from its previous close of Rs 1,043.40), which includes a premium of Rs 774 per share, over the face value of Rs 10 per share.
Also, the entitlement ratio is set at seven fully paid-up equity shares for every 94 equity share held by the eligible shareholders as on the record date, which is set by the company as of July 10, 2020. The rights issue will open on July 17, 2020 and close on July 31, 2020.
PVR Cinemas has also reported a substantial bearing caused due to the COVID-19 pandemic, which includes its impact on the company’s business and financial position. It has released its quarterly numbers for Q4FY20, reflecting a net loss of Rs 74.61 crore, incurred due to the Coronavirus outbreak.
The company's cinema screens have been closed since March 11, 2020 and since the cinema exhibition is the only division of the company, it has altogether not been producing any revenue. On the other hand, its expenses have not ceased and it continues to make payments of salaries to its employees, other overheads as well as payments for older working capital, which is considerably hurting the company's liquidity and profitability.
Going forward, even if the cinema reopens, the company is of the opinion that most likely, it will be unable to run on normal capacity due to requisite social distancing measures. Nevertheless, the company is hoping to get some relief with the reopening of cinemas that is likely to be announced in the third phase of unlocking India.