Carnival courts investor to resolve debt crisis
NEW DELHI : India’s third-largest multiplex chain, Carnival Cinemas, which has been embroiled in a controversy over unpaid employee contributions and owner rents, said it was at an advanced stage of concluding a deal. strategic alliance with a private investor who will help it resolve its debt crisis.
He did not name the investor, but said employee contributions will be covered by the end of this fiscal year.
Film trade and exploitation experts, however, said developers were increasingly taking their properties back from the company and selling them to other chains. But Carnival dismisses fears of closure and said he was on track to realize his “1,000-screen vision” and that Vishal Sawhney’s recent appointment as chief executive was a sign of that.
Owned by Shrikant Bhasi, an entrepreneur with interests in media, entertainment, hospitality and real estate, Carnival owns approximately 450 screens across India. According to data from business intelligence firm Tofler, Carnival Films Pvt. Ltd reported a consolidated loss of ??253 crore for the period ended March 31, 2019.
Sawhney, who was previously COO at Carnival, has over 20 years of experience in the entertainment, real estate and hospitality industries in India, West Asia and the United States. He has worked with companies like Landmark Group and PVR.
His appointment follows several high profile departures in recent months, with Kunal Sawhney, current COO, operations, also on notice.
“Our discussions for a strategic alliance have reached term-sheet levels and this investment will help us to write off debt and grow to reach the number of 1,000 screens which may be delayed but which we hope to reach over the next two years.” months and a half. at three years, ”said Prashant Kulkarni, senior vice president, sales, marketing and strategic alliances at Carnival.
Many companies, including those that are listed, are in debt, Kulkarni said, adding that shutting down cinemas during the covid pandemic meant the company had no operating income, with the situation compounded by the fact that she did not receive any relief, government subsidies or exemptions on fixed costs, like others in the company. Alongside Vishal Sawhney, who has “the right mindset to fuel growth and nurture developer relationships,” Kulkarni said the company will see three to four more appointments in the coming weeks and that ” people leave when new opportunities present themselves “.
Film trade experts said for Carnival that the crisis actually started before covid, and while the pandemic has devastated the theater industry in general, it’s far worse for that company.
“Carnival has always tried to play the numbers game with acquiring new screens and their portfolio is also good with decent properties in a good location. But they never worked on renovating or upgrading to provide a premium vibe in theaters, ”said a former employee who wished to remain anonymous.
Since the same content is shown in all theaters, this is the mood people are coming for, said the person who said he quit after not being paid for months.
About 4,000 people on and off Carnival’s payroll have yet to be compensated, the person said, and company contributions include staff salaries, landlord rent and payments to other partners distributors such as BookMyShow and Paytm, etc.
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