Exhib sells outstanding debt to Tele Munchen
BERLIN — In a move that will make him the main shareholder of Germany’s second-biggest exhib chain, Teutonic film and TV tycoon Herbert Kloiber has acquired the debt of multiplex operator Cinemaxx.
The exhib group announced Monday that its main creditor, Dresdner Bank, had sold its outstanding debt to Kloiber’s Tele Munchen Group.
As part of a planned restructuring of the financially wracked exhib, Tele Munchen is to transform the acquired debt into shares, giving Kloiber a majority in Cinemaxx. The exhib’s current management team is expected to remain intact.
Dresdner Bank has written off some $24 million in loans to Cinemaxx, which posted a half-year loss of $11.6 million in 2003. The exhib, which owns 49 theaters with a total of 356 screens, is due to release its full 2003 results next month.
For Tele Munchen, the loss-making company could initially provide a healthy tax writeoff. Tele Munchen reported record revenues in 2003 of $258 million. The group owns theatrical distribution, production and TV operations.
The restructuring plan depends largely on the cooperation of lessors who own the theaters leased to Cinemaxx: High rent prices have been one of the main financial squeezes on Germany’s exhib sector.