Top Imax shareholder boosts stake
California-based Douglas family buys 2.7 mil sharesIn a financing deal that will fund its upcoming digital projection rollout, Imax's largest shareholder has raised its stake in the giant-screen exhibitor to 19.9% after it bought 2.7 million shares for $18 million in a private placement.
The stock purchases, by the California-based Douglas family, take their holding to the maximum allowed under Canadian foreign-ownership regulations.
Toronto-based Imax also extended its credit facility with Wachovia Capital Finance to Oct. 31, 2010, with modifications to raise its borrowing limit.
Imax plans to use the proceeds from the deals to begin in July a rollout of new digital projection technology. Since its inception 40 years ago, Imax has used 70mm film to distribute and exhibit movies. By converting to digital, it will dramatically change its business model as digital distribution removes print costs -- about $22,000 for a 2-D print and $45,000 for a 3-D print -- from the equation.
There now are 296 Imax theaters operating in 40 countries. In the past two quarters, Imax has signed deals for 170 Imax digital theater systems, including joint-venture agreements with AMC Entertainment for 100 systems and Regal Cinemas for 31 systems.
Etan Vlessing reported from Toronto; Carolyn Giardina reported from Los Angeles.