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Investor Anschutz Close to Buying Regal Cinemas

Billionaire investor Philip Anschutz is close to taking control of the No. 1 U.S. theater chain, Regal Cinemas Inc., from two major private equity firms, Kohlberg Kravis Roberts & Co. and Hicks Muse Tate & Furst, Reuters reported. As part of the deal, Regal would file for a prepackaged bankruptcy action and seek court approval for an arrangement that would give Anschutz a 60 percent stake in Regal’s equity. The Denver-based Anschutz Corp., Philip Anschutz’s investment vehicle, and Los Angeles investment firm Oaktree Capital Management, hold a majority of Regal’s $1.8 billion in long-term debt. Much of that debt would be converted into equity under the terms of the bankruptcy deal. If the proposed deal were approved, Oaktree would hold a 15-percent stake in the struggling Knoxville, Tenn.-based company, with the remainder held by other parties.

Regal has already defaulted on some debt, which prompted creditors to demand an expedited payment schedule in the last year. The company said in June that it retained financial advisors to restructure its debt and said it may not continue as a going concern. It posted a net loss of $121.7 million in the first half of 2001.

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Regal lost $121.7M in the 1st 6 months of 2001. How can you go through all that money and still remain in business? Look at what happened to The Industry Standard.

How long before the new owners start shutting theaters? Regal has 6 theaters in northern New Jersey and I'd say 4 of the 6 are on the bubble.