BackCarnival woos investor to resolve its debt crisis
The multiplex chain says employee dues will be taken care of by FY22-end
_1616388715980_1639387410798.JPG "Carnival Cinemas currently owns around 450 screens across India.")
PremiumNEW DELHI:India's third largest multiplex chain Carnival Cinemas, which has been embroiled in controversy over unpaid dues to employees and rent to landlords, said that it is in advanced stages of locking in a strategic alliance with a private equity investor that will help resolve its debt crisis.
It did not name the investor, but said that employee dues will be taken care of by the end of this financial year.
Experts in the film trade and exhibition business, however, said that developers are increasingly reclaiming their properties from the company and selling to other chains. But Carnival dismisses fears of closure and claimed it is on track to realizing its ‘1,000-screen vision’ and that the recent appointment of Vishal Sawhney as chief executive officer was a pointer to that.
Owned by Shrikant Bhasi, an entrepreneur with interests in media, entertainment, hospitality and real estate, Carnival owns around 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 31 March 2019.
Sawhney, who was COO at Carnival earlier, has more than 20 years’ experience in the entertainment, real estate and hospitality industries in India, West Asia and the US. He has worked with companies like Landmark group and PVR.
His appointment comes on the back of several senior-level exits over the past few months, with Kunal Sawhney, current chief operating officer, operations, also on notice period.
“Our discussions for a strategic alliance have reached term-sheet levels and this investment will help us clear debt and expand to reach the 1,000-screen count that may be delayed but that we hope to achieve over the next two-and-a-half to three years," said Prashant Kulkarni, senior vice-president, sales, marketing and strategic alliances at Carnival.
Many companies, including those that are listed, have debt, Kulkarni, said, adding that the shutdown of theatres during the covid pandemic meant the company had no operational income with the situation aggravated by the fact that they were given no relief, government subsidies or waivers on fixed charges, like others in the business. Along with Vishal Sawhney, who has the “right mindset for fuelling growth and maintaining a rapport with developers", Kulkarni said the company would see three to four more appointments in the coming weeks and that “people leave when new opportunities come".
Film trade experts said for Carnival the crisis actually began before covid, and while the pandemic has devastated the theatre business in general, it is much worse for this company.
“Carnival has always tried to play the number game with the acquisition of new screens and their portfolio is also good with some decent properties at good locations. But they have never worked on refurbishing or upgrading to provide a premium ambience in cinemas," said a former employee who declined to be named.
Since the same content plays across theatres, it is the ambience that people come for, said the person who said he quit after not being paid for months.
Around 4,000 people on and off Carnival’s payrolls are yet to be compensated, the person said and the company’s dues include staff salaries, rent to landlords and payments to other distribution partners such as BookMyShow and Paytm, etc.
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