TEXT - S&P comments on Regal Entertainment Group

Mon Dec 3, 2012 3:47pm EST

Related Topics

Dec 3 - Standard & Poor's Ratings Services said today that Regal Entertainment Group's recent acquisition of 25 theaters with 301 screens from Great Escape Theatres for $91 million and its plan to make a special dividend of approximately $155 million will not affect our 'B+' corporate credit rating or stable rating outlook on the company. We expect Regal will maintain adequate liquidity, despite funding the acquisition and dividend with cash. Cash balances were $251.4 million as of Sept. 27, 2012. We expect that Regal will end the year with roughly $100 million of cash and an undrawn $85 million revolving credit facility.

Regal is paying a 5.5x EBITDA multiple for the acquisition. We believe that lease-adjusted leverage will remain roughly the same, in the mid- to high-5x area, after Regal assumes lease obligations from the acquisition. Under our base-case scenario, we expect leverage to increase to the low- to mid-6x area in 2013, because we expect attendance levels to continue to decline, and debt levels to remain high.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.