February 2008
GE Commercial Finance’s Media, Communications & Entertainment business has provided $55 million in financing to Reading International (AMEX:RDI), a Commerce, Calif.-based cinema exhibition and real estate company. The financing will support Reading International’s acquisition of a number of cinemas in California and Hawaii, operated by Pacific Theatres Exhibition Corp. Reading International currently owns and operates a majority of leasehold assets in Australia and New Zealand making this acquisition a key component for its plans to expand its presence in the United States.
“The uncertainty that exists in the credit market has caused many lenders to scale back and because of that, there has been an overall decrease in capital flowing into the film industry,” said Ray Shu, managing director, media for GE – Media, Communications & Entertainment. “GE has remained steadfast in its commitment to its clients as a world-class financier. We view Reading International’s U.S. expansion, which will add cinemas with annual revenue of approximately $80 million, as a major growth opportunity for the organization and the entertainment industry as a whole.”
Reading International primarily develops, owns and operates multiplex cinemas in the United States, Australia and New Zealand. Reading is also involved in the development, ownership and operation of retail and commercial real estate in Australia, New Zealand and the United States, including entertainment-themed retail centers (“ETRCs”) in Australia and New Zealand and live theater assets in Manhattan and Chicago in the United States.
“We are excited that this acquisition has given Reading the pre-eminent market position on the Hawaiian Islands at such an attractive multiple,” said Andrzej Matyczynski, chief financial officer, Reading International. “We are eager to provide the Reading quality experience to our new customers and are pleased that we have the opportunity to work with GE as we expand operations in the U.S., especially in the light of the difficult financial market conditions.”
GE acted as administrative agent for the transaction, which closed on February 22, along with GE Capital Markets as sole lead arranger. The GE business has committed over $1 billion in financing to companies in the film and theater industry, including Rave Motion Pictures, Panavision, and Christie/AccessIT.
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