Cineplex Makes Deal With Banks to Defer Payments

The Cineplex Odeon movie theater chain said Tuesday that it had reached an agreement with its banks that allows the company to defer principal payments until mid-1992.

The preliminary four-year agreement also allows the company to hold onto assets that were to be sold under a previous loan agreement.

Cineplex had been committed to selling $160 million (U.S.) in assets by Sept. 30. The company had raised $120 million (U.S.) by selling U.S. theater properties.

The new agreement also combines the company’s banks in two separate syndicates with three outside banks to form a single bank group.

Cineplex Odeon is one of the largest theater operators in North America, with 1,700 screens in 415 locations.

The company has been struggling recently because of a large debt load amassed in an aggressive expansion by former Chairman Garth H. Drabinsky.

In an effort to turn things around, Cineplex has been peddling assets not connected to its main cinema business.

The company has been loaned $100 million (U.S.) by the Claridge Group, controlled by Montreal financier Charles R. Bronfman, and the U.S. entertainment conglomerate MCA Inc., which was bought Monday by Japanese electronics giant Matsushita Electric Industrial Co.