EXCLUSIVE: The Kansas City-based exhibition chain accounts for about 6% of Canada’s box office revenues — but I’m told that its eight theaters, with 184 screens, are a tough sell because they’re hemorrhaging cash. Cineplex Entertainment (with 66% of Canada’s box office) and Empire Theaters (a subsidiary of a supermarket chain that has 13%) are said to be kicking the tires on some of the properties, which collectively generated $70.3M in revenue in the year that ended in April 2010. But AMC’s huge multiplexes have expensive leases, and some are in competitive film zones where the stronger chains have an easier time landing the most popular new releases. AMC may find a bad deal for the venues better than the status quo. The company’s owners — several funds led by J.P. Morgan Partners and Apollo Management — are said to be desperate to recoup their investments.
In March they told the SEC that they planned to take AMC public, but the initial public offering has been on hold as investors became uneasy about the exhibition industry and the economy. That’s a problem: Moody’s Investor service said in July that AMC’s ability to manage its huge debt “is questionable and largely depends on market conditions for the IPO.” Also holding back are some Chinese exhibition companies including Orange Sky Golden Harvest that have taken a look at the Kansas City-based exhibition chain. AMC lost $10.2M in the quarter that ended in September on revenues of $683.4M. up 4.5% from the same period last year. The company managed to report a $60.1M profit in the September quarter last year because it collected $64.6M from a sale of shares in National CineMedia.
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