The extended lockdown in India due to the coronavirus pandemic has cut off revenue streams for the country’s largest cinema chains.
If the outbreak is not under control within the next three months, then one of the largest cinema operators in India, PVR, is likely to run into problems without government assistance, according to its chairman and managing director.
“Our fixed costs are controllable and noncontrollable,” PVR’s Ajay Bijli told CNBC’s “Street Signs” on Wednesday. PVR says it operates around 821 screens in 70 cities across India and Sri Lanka.
Controllable costs include electricity and water bills, which go down when venues are not being used, he explained. Noncontrollable costs include things like rent, where many of PVR’s agreements have “force majeure” clauses that exempt the company from contractual obligations.
“It’s more about liquidity management than profitability. It’s difficult. The revenues are zero,” Bijli said, pointing out that no one could have…
