Regal's Chapter 11 Expected to Dump Two Mil SF on Market
KNOXVILLE, TN--The 11-year-old, locally based theater chain's Oct. 11 filing for protection from creditors in Nashville will leave the nation's largest movie exhibitor with 325 theaters and 3,700 screens, down from 4,361 screens at 396 locations in 32 states Regal Cinemas Inc. had once operated.
By Alex Finkelstein | October 12, 2001 at 01:01 AM
KNOXVILLE, TN-It's almost business as usual today for 11-year-old Regal Cinemas Inc., the nation's largest movie exhibitor now reorganizing under Chapter 11 of the U.S. Bankruptcy Code.
Under the reorganization plan, still to be approved by the Bankruptcy Court, the locally based firm's Oct. 11 filing for protection from creditors in U.S. Bankruptcy Court at Nashville will leave Regal with 325 theaters and 3,700 screens.
Those numbers are down from 4,361 screens at 396 locations Regal operated 18 months ago. Based on Regal's 338 operating locations prior to its Chapter 11 filing, the total leased or owned theater space was an estimated 10 million sf based on an average 30,000 sf per theater, GlobeSt.com research finds.
Regal plans to be out of Chapter 11 by January.
Regal chairman and co-founder Mike Campbell told the Knoxville News-Sentinel he plans to shut down at least 20% of the company's locations. That would equate to about two million sf of vacant space out of the total 10 million sf Regal now leases or owns in 325 locations in 32 states.
Campbell couldn't be reached at GlobeSt.com's publication deadline for comment. Campbell; Amy Miles, chief financial officer; Greg Dunn, chief operating officer; and Peter Brandow, general counsel, will remain as Regal's senior management team.
The voluntary bankruptcy filing marks the end of a 46-month ownership by New York-based Kohlberg Kravis Roberts & Co. and Hicks, Muse, Tate & Furst Inc. of Dallas. The two firms bought Regal in 1998 for $1.5 billion.
Denver billionaire Philip F. Anschutz and Los Angeles-based Oaktree Capital Management reportedly own about $750 million of Regal's $2 billion debt listed in its bankruptcy petition. That makes the two groups Regal's largest creditors. Assets listed also totaled $2 billion.
The proposed reorganization plan would allow Anschutz and his associates to trade the Regal debt they have bought for an equity position in the theater company, brokers intimate with the bankruptcy petition tell GlobeSt.com on condition of anonymity.
If the Bankruptcy Court approves the sale of Regal to the Anschutz group in exchange for its debt holdings, KKR and Hicks Muse would be freed of their $2 billion debt load but would receive nothing from the transaction.
The Anschutz group would then own 6,000 screens or about 20% of the theater industry, sources tell GlobeSt.com. The group already owns Edwards Theatres Circuit Inc. of Newport Beach, CA which is winding its way through Chapter 11 itself after filing in August 2000.
The chain owns 70 theaters with 739 screens. Edwards lost $40 milion in 1999 after earning $14 million in 1998, according to its filings with the Securities and Exchange Commission.