Mumbai, Dec 15 (IANS): Anil Ambani-led Reliance Capital Monday said it is selling its multiplex business to the hospitality-to-realty major Carnival Cinemas in a transaction that will reduce its overall debt by around Rs.700 crore.

The deal will also catapult Carnival Cinemas, which has more than 50 screens with plans for 75 more in the country in the next two months, as the third top multiplex player in the country, a statement by Reliance Capital said.

The Reliance Group, which has some 250 "Big Cinemas" screens across India under its entertainment arm Reliance MediaWorks, has the option to acquire a minority stakle in Carnival Cinemas at a discount, prior to an initial public offer by the company.

The deal excludes the real estate owned by Reliance MediaWorks at various locations and the group intends to leverage them separately to monetise them at an approximate value of Rs.200 crore, the statement added.

"The transaction is in furtherance of Reliance Capital's stated objective of focusing purely on its core financial services businesses, significantly reducing exposures to non-core investments in media and entertainment sector," CEO Sam Ghosh said.

Carnival Group chairman Shrikant Bhasi, a first-generation entrepreneur based out of this commercial and entertainment capital of India, said his group was targeting some 1,000 screens by 2017 and will work with Reliance Group in this regard.

"We are serious about exhibition business and moving in an organic way also. Carnival Cinemas will not only make their presence in Tier I but also lay emphasis for strong presence across Tier II and Tier III cities," Bhasi said.

"We want to make cinemas synonymous to Carnival."

The two groups propose to close the deal by the year-end and have KPMG as advisors.