Cineplex Plans $105-Million Theater Expansion

Cineplex Odeon Corp. will spend $105 million in the next three years to add 500 new screens to its chain of North American movie houses.

The expansion will double Cineplex’s earnings before interest, taxes and depreciation by 1999, Allen Karp, president and chief executive said Thursday.

“We are optimistic we can build theaters on time, on budget, on [an] economically sound basis--and deliver dramatic returns on the cash we invest,” Karp told shareholders at its annual meeting.

The Toronto-based company now operates 1,500 movie screens at 320 locations throughout North America.

The new screens--about half in Canada and half in the U.S.--will be added at existing and new locations.

Through MCA Inc., which owns 40% of Cineplex, and Montreal’s Charles R. Bronfman Trust, which holds 22%, the Bronfman family now effectively controls Cineplex.

Robert Tokio, executive vice president, said weak retail and real estate markets in major cities prompted the company’s move now.

“We are paying less for locations in 1996 than we were 13 years ago,” he said. “This is as opportunistic time as we have had” for developing new theaters.

Large department stores have given way to entertainment centers as the main drawing card at shopping malls, Karp said. The company now receives dozens of offers from developers hoping to attract a Cineplex theater, he said.