HONG KONG – Reliance ADA Group, the Indian backer of DreamWorks, has agreed to sell its Big Cinemas chain to Carnival Cinemas in what is believed to be the biggest ever deal in the Indian multiplex sector.

The deal was announced by Reliance Capital, on behalf of Reliance MediaWorks, the struggling subsidiary of Reliance Entertainment that has operated the Big Cinemas theaters since swallowing the Adlabs company in 2006.

Precise details of the transaction were not released, but Reliance Capital said that it would reduce debt by $112 million, while still holding on to $32 million of underlying property assets.

Reliance Capital insisted that the disposal is in line with a “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.”

However, the deal is a major climb down for Reliance ADA and Reliance Entertainment. Under their management the chain slipped from being the market leader in the Indian multiplex sector to third.

And, as with previous entertainment sector disposals, the group seems to want to still hang on. Reliance described the deal as the “[beginning of] a long term relationship with the rapidly growing Carnival Group,” and reported that it had an option to buy a minority stake in Carnival if and when it makes an initial stock market listing.

When the deal completes its necessary regulatory clearances, Carnival will at once become India’s number three cinema group behind PVR and Inox Leisure. The approximately 250 Reliance screens will lift it to over 300 nationwide.

“We are targeting to achieve 1,000 screens by the year 2017,” said Shrikant Bhasi, chairman of the Carnival group, in a statement. That will be achieved through organic growth, especially in second and third tier cities, he suggested.