Peter Kline
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Friday October 12, 4:13 pm Eastern Time
Regal Cinemas Founder Sees Strong Co.
Founder Expects Regal Cinemas Chain Will Emerge 'Stronger' After Chapter 11
By DUNCAN MANSFIELD
Associated Press Writer
KNOXVILLE, Tenn. (AP) -- Regal Cinemas Inc., the nation's largest movie theater chain, will emerge from bankruptcy reorganization a ``much stronger'' company, Regal chairman and founder Mike Campbell said Friday.
The Knoxville-based chain, taking a route similar to several of its competitors, filed a petition for Chapter 11 reorganization late Thursday in U.S. Bankruptcy Court in Nashville.
It had said last month it planned to make such a filing and said Friday its reorganization plan had the support of a majority of its creditors.
If accepted by the court, the move will effectively transfer ownership of Regal from Kohlberg Kravis Roberts & Co. of New York and Hicks, Muse, Tate & Furst Inc. of Dallas to a consortium led by Denver billionaire Philip Anschutz.
Anschutz already owns the United Artists and Edwards theater chains.
The reorganization is expected to take 60 to 90 days, during which Regal expects to close an additional 20 to 25 older theaters, most in cities where it already has a presence. The company already has closed about 100 theaters in the past year.
Layoffs, however, should be minimal and Regal expects to emerge from bankruptcy as the largest movie exhibitor in the country with some 3,700 screens and more than 300 locations.
The bankruptcy filing comes with the approval of 95 percent of Regal's creditors, all of whom are expected to be repaid.
``When you are going to get 100 cents on the dollar you really don't get much better than that,'' Campbell said.
The exception is KKR and Hicks, Muse, which paid $1 billion for Regal in a leveraged buyout in 1998. Under the reorganization, they will get nothing.
For Campbell, a former grocer who built one theater chain, sold it and then formed Regal in 1989, the bankruptcy filing comes with mixed emotions.
``Well, it is a company that I started 11 years ago, and it has been to the top of the mountain top and down in the valley,'' he said. ``But it is still a healthy company.''
The last couple of years ``have proven that certainly our company is not immune from the overall issues that haunted the industry as a whole. And that is related to two things -- the balance sheet and real estate issues,'' he said.
The industry suffered from an overcapacity of multiplexes, fueled by a debt-driven building boom.
Regal's debt rose to nearly $2 billion as its screen count neared 4,500. Campbell said debt should be down to about $500 million after reorganization.
So the Chapter 11 filing comes with some relief for Regal.
``We are glad to be at this point and ... finally, officially into our restructuring phase, legally,'' Campbell said. ``We will come out of this much stronger.''
A $181 million pool will be established for holders of Regal's subordinated notes and a $75 million pool will be created for unsecured creditors of more than $5,000. The company said all unsecured creditors of $5,000 or less will be paid in full with interest.
Meantime, the $500 million to $750 million in Regal debt acquired by Anschutz and Los Angeles investment fund partner Oaktree Capital Management will be converted to equity.
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Regal Cinemas Founder Sees Strong Co.
Founder Expects Regal Cinemas Chain Will Emerge 'Stronger' After Chapter 11
By DUNCAN MANSFIELD
Associated Press Writer
KNOXVILLE, Tenn. (AP) -- Regal Cinemas Inc., the nation's largest movie theater chain, will emerge from bankruptcy reorganization a ``much stronger'' company, Regal chairman and founder Mike Campbell said Friday.
The Knoxville-based chain, taking a route similar to several of its competitors, filed a petition for Chapter 11 reorganization late Thursday in U.S. Bankruptcy Court in Nashville.
It had said last month it planned to make such a filing and said Friday its reorganization plan had the support of a majority of its creditors.
If accepted by the court, the move will effectively transfer ownership of Regal from Kohlberg Kravis Roberts & Co. of New York and Hicks, Muse, Tate & Furst Inc. of Dallas to a consortium led by Denver billionaire Philip Anschutz.
Anschutz already owns the United Artists and Edwards theater chains.
The reorganization is expected to take 60 to 90 days, during which Regal expects to close an additional 20 to 25 older theaters, most in cities where it already has a presence. The company already has closed about 100 theaters in the past year.
Layoffs, however, should be minimal and Regal expects to emerge from bankruptcy as the largest movie exhibitor in the country with some 3,700 screens and more than 300 locations.
The bankruptcy filing comes with the approval of 95 percent of Regal's creditors, all of whom are expected to be repaid.
``When you are going to get 100 cents on the dollar you really don't get much better than that,'' Campbell said.
The exception is KKR and Hicks, Muse, which paid $1 billion for Regal in a leveraged buyout in 1998. Under the reorganization, they will get nothing.
For Campbell, a former grocer who built one theater chain, sold it and then formed Regal in 1989, the bankruptcy filing comes with mixed emotions.
``Well, it is a company that I started 11 years ago, and it has been to the top of the mountain top and down in the valley,'' he said. ``But it is still a healthy company.''
The last couple of years ``have proven that certainly our company is not immune from the overall issues that haunted the industry as a whole. And that is related to two things -- the balance sheet and real estate issues,'' he said.
The industry suffered from an overcapacity of multiplexes, fueled by a debt-driven building boom.
Regal's debt rose to nearly $2 billion as its screen count neared 4,500. Campbell said debt should be down to about $500 million after reorganization.
So the Chapter 11 filing comes with some relief for Regal.
``We are glad to be at this point and ... finally, officially into our restructuring phase, legally,'' Campbell said. ``We will come out of this much stronger.''
A $181 million pool will be established for holders of Regal's subordinated notes and a $75 million pool will be created for unsecured creditors of more than $5,000. The company said all unsecured creditors of $5,000 or less will be paid in full with interest.
Meantime, the $500 million to $750 million in Regal debt acquired by Anschutz and Los Angeles investment fund partner Oaktree Capital Management will be converted to equity.
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The CEO of that company engaged in stupid business practices and now it is the regular employee that pays the price with his/her job. He, on the other hand, walks out rich. No sitting on the bread line for him.....unlike 30 or 40,000 former employees.
