Anticipating that it may take some time for people to return to theatres, PVR's Ajay Bijli told CNBC that the company may be forced to lay off people without a bailout from the government.
Cinema chain PVR is facing a severe cash crunch and may likely run into "problems" without government assistance if the lockdown is not lifted in the next three months, said its chairman and managing director Ajay Bijli.
“It’s more about liquidity management than profitability. It’s difficult. The revenues are zero. I think the idea is only to be able to see through it, that it doesn’t go beyond 2-3 months because after that liquidity can become a problem as well," he said.
Anticipating that it may take some time for people to return to theatres, PVR's Ajay Bijli
told CNBC that the company may be forced to lay off people without a bailout from the government.
“Unfortunately, if we find that we are not getting any government support, and the occupancies when we open are going to be less, then I don’t think we’ll have any choice but to start asking to leave,” Bijli said, adding, “That will be really, really sacrilegious.”
"Our fixed costs are controllable and non-controllable,” he said, explaining that controllable costs, including electricity and water bills, have gone down since its venues are not being used.
Meanwhile, for non-controllable expenses such as rent, it has “force majeure” clauses at most of its facilities that exempt the company from contractual obligations. It operates around 821 screens in 70 cities across India and Sri Lanka.
PVR shares are down more than 47 percent year to date. It closed at Rs 994, down 3.38 percent on April 22.
First Published on Apr 23, 2020 09:51 am
