Mumbai: L Capital Eco Ltd, an international private equity fund, has agreed to invest a total of Rs 1.07 billion in PVR Ltd, a film exhibition and in-mall entertainment company.

The definitive agreement signed by the two companies envisages issue of 2,885,000 equity shares of PVR Ltd for Rs 577 million (at a price of Rs 200 per share) to L Capital Eco on a preferential basis.

The preferential allotment will give the private equity investor a 10 per cent stake in PVR. The approval of the shareholders of PVR will be obtained through a postal ballot. PVR operates 179 movie screens across 24 cities.

The price is at a 21 per cent premium to PVR?s closing price of Rs 165.95 on the National Stock Exchange on 31 July. PVR shares rose 11.33 per cent to close at Rs 184.75 on 1 August.

PVR and L Capital will also set up a new joint venture company called PVR Leisure Limited, in which in-mall entertainment, gaming, food and leisure businesses will be housed.

PVR will transfer its holding in PVR bluO Entertainment Ltd to PVR Leisure and L Capital will invest Rs 501 million in PVR Leisure for an unspecified equity stake. The new joint venture will be subject to approvals from Foreign Investment Promotion Board (FIPB).

L Capital Eco, a Mauritius-registered company, is a subsidiary of L Capital Asia LLC, the Asian private equity business sponsored by leading global luxury goods retailer LVMH.