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Regal Cinemas To Get New Owner

Discussion in 'Archived Threads 2001-2004' started by Peter Kline, Oct 14, 2001.

  1. Peter Kline

    Peter Kline Cinematographer

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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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  2. Jesse Skeen

    Jesse Skeen Producer

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    I worked for one of their theaters for a year and just left last month. There are a lot of people in charge at this company who don't know what they're doing. When I started working there I was blown away by all the things wrong with the equipment (which I fixed, with no thanks from anyone at all). The last straw was when their "technician" forced me to have the projectors' lens turrets automatically change to "Flat" in between all shows unnecessarily (throwing off the Scope lens's aim at the screen I took great pains to get perfect). I looked for a new job right away.
     
  3. Hubert

    Hubert Second Unit

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    Weird! The Regal theater I go to is state of the at in picture and sound, and has never faltered. Not only that, how can a company go bankrupt when box office numbers are higher than ever?
     
  4. Peter Kline

    Peter Kline Cinematographer

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    They can go bankrupt because box office numbers mean nothing. The film companies make most of the money off admissions as the theatre keeps very little. Theatres make money off concession sales.
    That's why soda, popcorn and hot dogs are so outrageously expensive.
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  5. John Thomas

    John Thomas Cinematographer

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    I'm glad to hear this. Our local Regal Cinema (and Malco) was purchased by Ajay (Hollywood) Theaters. Ever since the purchase, every one of the theaters has gone downhill. The owners appear to not care about upkeep or running their movies properly. I suppose cutting corners is part of everyday business but this goes beyond that. Anyhow, back on topic with a snippet lifted from their website :
     
  6. Edwin-S

    Edwin-S Producer
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    ----The first thing that comes to mind is poor corporate management; the article sites "an overcapacity of multiplexes, fueled by a debt-driven building boom" - is the theater industry the only one susceptible to this?----
    No. I can think of another example outside of the theatre industry. It is called NORTEL NETWORKS. [​IMG] 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.
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