Friday, February 16, 2001

Investors buying hard-up Loews




The Associated Press

        NEW YORK — A group of investors led by Canadian conglomerate Onex Corp. announced plans Thursday to buy Loews Cineplex Entertainment Corp. as the financially troubled movie theater chain filed for bankruptcy protection.

        The acquisition of Loews, the No. 2 movie theater operator in the world, will be financed by converting about $250 million of Loews debt owned by the investors into an 88 percent stake in the newly reorganized company, Onex spokesman Eric Rosen said. (Loews does not operate in Greater Cincinnati.)

        Unsecured creditors will hold the remaining 12 percent, while existing Loews shareholders will get nothing, Loews said.

        The Toronto-based Onex and the other investors — Oaktree Capital Management LLC and Pacific Capital Group Inc., both based in Los Angeles — will also assume about $600 million in Loews debt, Mr. Rosen said.

        “Loews Cineplex has very attractive assets in terms of the high quality of its theaters and their important major market locations,” Onex president and chief executive Gerald W. Schwartz said.

        New York-based Loews is closing 112 aging movie venues in the United States and Canada, turning about 675 of its screens dark. That is almost 23 percent of its screens worldwide.

        Loews has about 12,000 full- and part-time employees, but spokeswoman Mindy Tucker said she did not know how many jobs would be cut because of the theater closings.

       



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