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E-City to invest Rs 4.5 billion in multiplexes

E-City Entertainment, part of the Essel Group that promotes Zee Telefilms Ltd, will invest Rs 4.5 billion in setting up 14 entertainment centres across India, a company official said on Friday.

"The family entertainment centres, at an estimated cost of Rs 4.5 billion, will be up and running in major towns across India by 2003," Atul Goel, chief officer for business development at E-City Entertainment Private Ltd said.

The first of the 14 multiplexes, named "Fun Republic", was recently inaugurated in the western city of Ahmedabad in Gujarat, and the company is in the process of acquiring land and civil work for the other projects.

The Ahmedabad multiplex houses half a dozen cinema halls, departmental stores, book and music stores, games alleys and restaurants.

E-City Entertainment's next multiplex will open in Bombay next year and will be followed by Delhi, Chandigarh, Lucknow, Jaipur, Hyderabad, Bangalore, Pune, Madras, Calcutta and Baroda.

Goel said the company had already invested about Rs 1.1 billion in the Ahmedabad multiplex and in acquiring land in other cities.

"Currently we have a debt-equity ratio of about 1.6:1 and this could go up to 2:1 over a period of time as we require more money to fund the projects," he said.

The company has borrowed Rs 800 million from some leading banks like HDFC Bank, he said.

He said the holding company of E-City Entertainment, E-City Holdings Ltd, could lower its stake in the company through a private placement some time in the future.

He said the company was expected to break even two years after all units became operational.

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