Theme park operator slugged $8 million
THEME parks and cinema operator Village Roadshow will be slugged $8 million and an associated US entertainment company faces bankruptcy after it missed a $14.6 million interest payment.
In a statement to the ASX this morning, Village said luxury theatre chain iPic Entertainment, of which it is 24.4 per cent owner, may be declared in default by its lenders and could face bankruptcy or a restructure.
Village said its investment in iPic was carried at nil in its accounts and the $8 million liability would be the only impact on the group.
Village Roadshow's executive chairman Robert Kirby is a director of iPic Entertainment, which is modelled on Australia's gold class cinemas.
iPic's precarious situation was outlined in a note to its investors late last week, in which it said its lenders, the Employees Retirement System of Alabama (ERSA) and the Teachers Retirement System of Alabama, could foreclose on the properties secured under the $295 million loan.
It said the secured properties included "substantially all of our assets".
"If we are unable to restructure our outstanding indebtedness, including our credit facility with RSA, our significant indebtedness and lack of liquidity will have a material adverse effect on our business, prospects, financial condition, and our ability to continue as a going concern," it said in public filings.
The US company listed on the NASDAQ in February 2018, with Village Roadshow's initial liability to the company at $35 million.
Village Roadshow last month promoted its theme parks boss Clark Kirby to the role of company CEO after months of speculation.
In an announcement this afternoon, Village said Mr Kirby, grandson of Village founder Roc Kirby, would commence the role on new Years Day.
The company will split its longstanding dual role of CEO and executive chairman, currently held by Robert Kirby, in an effort to streamline its board structure, which had come under fire from investors an analysts.
Shares in Village Roadshow opened at $2.73 this morning.