Two U.S. investment funds have bought an Argentine exhib chain from Australia’s Village Cinemas Intl. and New Zealand’s Sky City Cinemas.
Southern Screens Entertainment II and Blue Ridge now own 78% and 22%, respectively, said Sebastian Valenzuela, general manager of the exhib chain.
The pair have bowed out of Village Cinemas after a decade building Argentina’s second-biggest exhibition loop in terms of seating.
Village Cinemas, which has 69 screens at six hardtops, plans to open a nine-plex this month in Buenos Aires — where it expects 1 million admissions a year — and is eyeing more locations, Valenzuela said.
While admissions are expected to slump 15%-25% this year from 2004’s 42 million, a stronger slate of pics, including “Ice Age 2,” “Mission: Impossible 3” and a sequel to local hit “Patoruzito,” is expected to bolster biz in 2006.
Plexes pull in 70% of B.O. receipts yet make up 40% of theaters. This means there’s room for growth for higher-quality venues, Valenzuela said.
The sellers capitalized and forgave some of the chain’s debt. The exhib now plans to restructure its $42 million debt in bonds, making it easier to spend on expansion, Valenzuela added.
Hoyts Cinemas is the leading exhibitor, with a 29% share of seating. Other players include Cinemark and National Amusements’ Showcase Cinemas.
Summerfield K. Johnston Jr., a former CEO-chairman of Coca-Cola Enterprises, the world’s biggest bottler of Coca-Cola soft drinks, is the main partner in Southern Screens Entertainment II.