The deal excludes certain real estate assets in Mumbai and other properties valued at about Rs 200 crore, which the Group's financial services arm Reliance Capital plans to sell separately as part of plans to exit from non-core businesses and lower its debt.
The Carnival transaction will reduce Reliance Capital's leverage by approximately Rs 700 crore, through a combination of transfer of debt of Reliance MediaWorks and an infusion of cash proceeds, the two companies said in a joint statement.
The firms did not disclose the exact value of the deal, but sources said the transaction that involves debt transfers too, could be worth Rs 700 crore.
Reliance Capital CEO Sam Ghosh said the deal is in furtherance of its "stated objective of focusing purely on its core financial services businesses, significantly reducing exposure to non-core investments in the media and entertainment sector, and reducing overall debt."
The deal will make Carnival the third-largest multiplex operator with nationwide presence and over 300 screens. Other major players in this business include PVR and INOX.
Reliance Capital will retain an option to acquire a stake in pre-IPO stage "at an appropriate discount" whenever Carnival goes for a listing.
The properties excluded from today's deal, struck by Reliance Capital unit Reliance MediaWorks, include IMAX Wadala multiplex's real estate assets in Mumbai.
Reliance Capital is the parent firm of Reliance MediaWorks, which operates one of the largest cinema chains, under the brand 'BIG Cinemas' with over 250 screens pan-India.
Carnival Group chairman Shrikant Bhasi said it'stargeting to achieve "1,000 screens by the year 2017". The proposed transaction is subject to necessary statutory and other approvals and is expected to be closed within the current financial year.
Reliance Capital had recently announced plans to focus on core business and is in the process of encashing its minority investments.
It also recently exited from day-to-day operations of its global film and media services business by merging its global film and media services business with Prime Focus.
The deal created the world's largest media services power house, with an order pipeline of Rs 2,000 crore, over 5,500 employees and operations in the US, UK, Canada, China and Singapore, besides India.
Reliance MediaWorks and Prime Focus promoters infused fresh equity capital of Rs 120 crore each into Prime Focus.
Reliance Cap is also in talks with 2-3 international investors to sell its 16 per cent stake in leading travel portal Yatra.com for an estimated Rs 500 crore.
Shares of Reliance Capital on Monday closed 0.86 percent down at Rs 520.85 apiece on the BSE.