Cineline India Ltd monetizes Hotel Asset for INR 270 crores, becomes Net Debt-Free company

Cineline India Limited is pleased to announce the successful monetization of its hotel asset, "Hyatt Centric" in Goa, owned by its wholly-owned subsidiary, R&H Spaces Private Limited, for an enterprise value of INR 270 Crores through sale of Company to Sparsh Vidhyut Private Limited on 28th March 2025. This has resulted into debt reduction of INR 120 Crores pertaining to the hotel asset at subsidiary level.

Additionally, the company plans to utilize the sale proceeds to fully repay its outstanding debt of INR 108 Crores related to the film exhibition business, achieving a debt-free status. The remaining surplus will be allocated towards expansion of film exhibition business (Core Business).

Since the launch of the film exhibition brand "MovieMAX" in April 2022, the company has expanded to 77 operational screens, with an additional 82 screens tied up. The Company has successfully monetized non-core real estate assets worth INR 351 Crores over the past two years (including the sale of a hotel for INR 270 Crores, Eternity Mall in Nagpur for INR 60 Crores, and two commercial spaces in Mumbai for ~INR 21 Crores). The proceeds have been strategically utilized to expand the film exhibition business and fully repay the Company's debt.

The company has outlined three key strategic priorities to drive the growth of its core film exhibition business. These strategic initiatives will position the company for sustained growth while maintaining financial prudence.

- Generating Sustainable Free Cash Flow: With debt reduction through the hotel sale, the company will now save ~INR 22 Crores annually in debt servicing, allowing for regular free cash flow generation. This will support planned expansion of new screens. Additionally, the company can further monetize its eight owned cinema properties to accelerate expansion in the future.

- Adopting a 'Capital-Light' Growth Model: The Company seeks to partner with developers for joint investments in new screen infrastructure, reducing annual capital expenditure while enhancing capital efficiency

- Expanding Through a 'Revenue Share' Model: Future screen additions will primarily follow a revenue-sharing approach, reducing fixed rental obligations and enhancing financial flexibility.

Commenting on the company's performance, Mr. Ashish Kanakia, CEO of Cineline India Limited, stated: "We have successfully completed the sale of our hotel asset for an enterprise valuation of INR 270 Crores, allowing us to fully concentrate on expanding our core film exhibition business. This move will accelerate growth and help expand our market presence through addition of new screens.

With debt to be fully repaid, we would strengthen our financial position and generate consistent free cash flow, which will be reinvested to drive business growth. By leveraging innovative strategies such as expanding screens through a Low Revenue Share or profit-sharing model with developer-funded capex, we are well-positioned to capitalize on the anticipated box office revival, unlocking significant upside potential."

Shares of Cineline India Limited was last trading in BSE at Rs. 81.40 as compared to the previous close of Rs. 77.53. The total number of shares traded during the day was 16390 in over 32 trades.

The stock hit an intraday high of Rs. 81.40 and intraday low of 80.35. The net turnover during the day was Rs. 1333831.00.

Source : Equity Bulls

Keywords

CinelineIndia INE704H01022 Monetization HotelAsset HyattCentric Goa NetDebtFree