PVR: Approves rights issue of Rs 300 crore to enhance collapsed liquidity
PVR Cinemas has reported the substantial bearing the COVID-19 pandemic has had on its business and financial position. It has released its quarterly numbers for Q4FY20, reflecting a net loss of Rs 74.61 crore suffered by Coronavirus outbreak.
The company's cinema screens have been closed since March 11, 2020, and since 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 employees, other overheads and payments for older working capital, which is considerably hurting the company's liquidity and profitability.
Going forward, even with the cinemas reopening, the company is of the opinion that it most likely will be unable to run on normal capacity due to requisite social distancing measures. Yet, the company may still get some relief with the reopening of cinemas that is likely to be announced in the third phase of unlocking India.
Taking measures to enhance the company's liquidity, the board of directors has authorized a rights issue of Rs 300 crore. Additionally, the company has taken relief by moratorium on interest and principal repayment for the period March-August 2020.
PVR's stock witnessed gap-down opening by three per cent, at Rs 1,128.20 today on BSE.