Carmike reorg would ax sites, alter stakes

Exhib files for bankruptcy

Carmike Cinemas has filed a bankruptcy reorganization plan that would shutter 25 of its remaining 330 theaters and lower existing shareholders’ stake to 22%.

The planned closings are more modest than those under way at the nearly dozen other exhibs that have filed for bankruptcy reorganization over the past year or so. Also unlike those other Chapter 11 restructurings, Carmike’s reorganization doesn’t involve any major new players but merely shuffles the relative positions of Columbus, Ga.-based company’s current backers.

About $46.5 million in preferred stock would be converted to common shares under the plan. Goldman Sachs, which holds all the preferred stock, would get a 40% stake in Carmike’s reshuffled shares and become circuit’s biggest shareholder.

If the plan is approved by U.S. Bankruptcy Court in Wilmington, Del., Carmike could emerge from bankruptcy within the next few months. Chain still would rep one of the nation’s biggest circuits with some 305 theaters and 2,200 screens.

Exhib already has shut more than 100 theaters, and its reorganization plan would close more money-losing properties. Plan also would restructure $263 million in Carmike bank loans and $20 million in senior subordinated notes.

The Carmike and other recent exhib bankruptcies are tied to a recent megaplex-building binge that piled chains high with debt while letting loose cutthroat competition.

(Bloomberg News contributed to this report.)

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