Bondholders give Imax more time to file results
Imax Corp., the beleaguered builder of big screens, said Friday that it had been given a reprieve by a majority of its bondholders to avoid defaulting on a $160-million note.
The Canadian company’s troubles stem from an informal investigation launched last year by the U.S. Securities and Exchange Commission into whether revenue was booked during the correct quarter.
The theater company has twice extended a deadline to file its 2006 financial report because of discussions with the SEC about when revenue should have been recorded. Its failure to file the report triggered a default provision in its debt agreement with bondholders that gave the company 30 days to come into compliance.
A final agreement with bondholders will be announced Monday, but Imax said a majority of them had agreed to give the company more time to file.
The financial strains come as Imax is enjoying one of its most successful theatrical runs ever.
Last year, its box-office sales were elevated by Warner Bros.’ “Happy Feet” and 20th Century Fox’s “Night at the Museum.”
This year, the company is seeing record box-office grosses with Warner Bros.’ “300.” The theater chain is looking forward to this summer’s expected blockbusters: “Spider-Man 3” and “Harry Potter and the Order of the Phoenix.”
The company hopes to install digital projection in all of its theaters by early 2009.
“We are in a dual world where the business is doing great and we are dealing with some issues from the past,” said Richard L. Gelfond, co-chief executive of Imax.
The company has made deals to implement 70 additional screens worldwide.
Last week, Imax named Joseph Sparacio chief financial officer. Sparacio came to Imax after several years as a top financial executive for Loews Cineplex Entertainment Corp., which was acquired by AMC Inc. last year.
Imax stock rose 43 cents Friday to $4.59.
“The company is doing well operationally,” said Corey Hammill, analyst for Paradigm Capital Inc., a brokerage firm based in Canada.
“I am optimistic that the company will work through the financial restatement.”
The biggest entertainment stories
Get our big stories about Hollywood, film, television, music, arts, culture and more right in your inbox as soon as they publish.
You may occasionally receive promotional content from the Los Angeles Times.
