Shari Redstone, taking control of a pet project, has joined with a private equity firm to acquire a Russian movie theater chain from her family-owned National Amusements Inc. Terms were not disclosed.
The acquisition of the Rising Star Media circuit, which operates in Moscow and St. Petersburg, comes as National Amusements, run by Shari Redstone and her father, Sumner Redstone, has been selling theaters to help pay down debt.
National Amusements recently reached a deal to sell 35 U.S. theaters, including the Bridge Cinema de Lux multiplex in Los Angeles, to Texas-based Rave Cinemas. Last fall, the elder Redstone sold nearly $1 billion in stock in the two media companies he controls, Viacom Inc. and CBS Corp., to help retire the $1.46 billion that National Amusements owed lenders.
After the sale of the Russian theaters, National Amusements is not expected to unload any other assets.
"We're in really good shape," Shari Redstone said in an interview Thursday.
Redstone said the situation at National gave her the opportunity to take direct control of the six-theater, 74-screen Russian circuit that she launched in 2002 with exhibition entrepreneur Paul Heth, something she has long wanted.
"Russia was always a very important passion project for me," Redstone said. "So, to control and direct the future of this company is very exciting."
Rising Star was the first U.S.-backed theater chain to venture into Russia and is still the only non-Russian exhibitor in the country with five of the nation's top-grossing cinemas, Redstone said. Two of the multiplexes feature state-of-the-art Imax digital projection screens, and all have RealD 3-D cinema systems.
Russia, with some 3,000 screens, is one of the world's fastest-growing markets for U.S. movies. "It's one of the most challenging and exciting markets in the world, and the potential for growth is tremendous," Redstone said.
Redstone said she and her partners would continue to expand their theater chain under its established name, Kinostar. Redstone, who bought the circuit with Charles Ryan of UFG Private Equity, will be chairman of the new entity. Heth will be president.
"We want to be smart and conservative but want to very aggressively grow our business both through building and acquisitions," said Redstone, who expects to make at least one acquisition in the next nine months.
As vital a market as Russia is, Redstone said it's not without its difficulties.
"It's a very unique culture," she said. "You have to understand the politics, the economy and the negotiating process when working with landlords."
Redstone, who remains president of the Norwood, Mass.-based National Amusements, which operates more than 1,000 screens, including some in Britain and Latin America, has in recent years had a tumultuous relationship with her father over succession and issues related to their family empire.
Asked how things stand today, Redstone said, "Everything is fine."