A few years ago, when there were reports in the media that PVR Cinemas was trying to take over SPI Cinemas, it evoked an instant response from its fierce patrons on social media. The reactions ranged from pleading to aggressive disapproval, clearly sending out a message to its promoters to not sell.
At the time, there was speculation that certain political compulsions may have played a role. In 2015, there were murmurs that the promoters had to part with one of their properties, Luxe Cinemas, in Phoenix Mall, Velachery, due to undue political pressure from those perceived as close to the ruling party then.
Since the PVR acquisition deal didn’t happen then, everyone – including those working for SPI Cinemas – came to believe that it was off.
However, the promoters' – Kiran Reddy and Swaroop Reddy – decision to sell their business on Sunday has baffled many. Were political compulsions one of the main reasons for the deal?
'No political compulsions'
Speaking to The Hindu , Kiran Reddy, who is the CEO of SPI Cinemas, categorically said: “Not at this time…Not at this time. The last time, yes.”
Mr. Reddy said that the company had experienced ‘explosive growth’, which means it was actually borrowing more money.
“It is a capital intensive business and it puts enormous strain on cash flow. So, on a personal level, it was putting strain on me – it had come to a point where, maybe if not now but in six months or a year, I would have to raise capital because debt as a route of continuing business was not something I could feel comfortable with as a promoter,” he said, adding, “I did not want to bring it to a stage where my own personal fears would come in the way of doing what is right for the business.”
Mr. Reddy said the deal would enable the company to grow without any constraints: “I will now not be responsible for bringing capital into this business. So, I don't feel the pressure of it. I don’t have my own personal debt. I am free to grow without any constraints and restrictions.”
He also clarified that current management would not be stepping back and will be very much a part of the operations.
“Given the current scenario, it seems like my involvement is only going to increase right now. For the past few years, I had actually stepped back. When I say stepped back, my role moved to being a mentor and guide to the organisation focussing on the vision, culture and where we need to be,” said Mr. Reddy.
'Emotional support'
“This time, the organisation needs me more because I need to give that emotional support- it is a situation where I am saying, listen: a large part of your company has been acquired by somebody else and yet I’m actually going to have the independence to run it. People are not going to believe it. They are not going to believe it because even if that's my intent – will it actually happen? You can’t predict what will happen in reality but the starting point is that they [PVR Cinemas] value what we have and they recognise what we have.”
