Village Roadshow continues to shrink its asset base to cut debt and save the company from a credit crunch.
A month ago it restructured its Hollywood presence, downsizing its stake in Village Roadshow Entertainment Group (VREG) to just 20% after previously holding a 50.17%.
Financiers Vine Alternate Investments and Falcon Investment Advisors have taken over the rest of Village Roadshow’s stake and Vine’s chief executive, Jim Moore, will become chairman of VREG while senior management will stay in place.
Yesterday Village told the ASX is in talks to offload its 50% stake in its Singapore cinema business.
The company said it was discussing the potential sale of the holding in the Golden Village cinema exhibition business. The mooted purchaser is film and TV content producer mm2 Asia.
Golden Village runs 11 multiplexes housing 91 screens in Singapore. But the business has struggled in the sluggish Singaporean economy in the past year and brought in earnings of just $4.7 million for the six months to December 31.
Golden Village is owned by Hong Kong company, Dartina Development. The statement said the potential sale is at a preliminary stage and mm2 Asia said there was no assurance that the proposed purchase would materialise.
Village Roadshow has previously said it would sell assets to cut debt, and in April warned that theme park visitor numbers for the first nine months of the financial year were down 9.4% following last October’s fatal accident at rival park Dreamworld and Tropical Cyclone Debbie.
Village Roadshow reported a post-tax loss of $5.7 million in the first half of 2016-17, compared to a post-tax loss of $2.8 million in the previous corresponding period.
The board noted at its half-year results that a net debt to earnings ratio of 3.27 was “unacceptable” and suspended dividends and said it would sell assets to cut debt, Cutting its stake in VREG was the first major move. Now for a second.
Village shares jumped 3.1% to $3.64.
