Regal will try balancing act
Movie exhibitor cuts quarterly dividend by 40%NEW YORK -- Regal Entertainment Group is cutting its quarterly dividend by 40% as it carefully manages its finances in the recession and amid a tight credit market.
The movie exhibitor on Wednesday also unveiled an agreement with lenders that eases its performance standards required by a credit line. That move comes as many in corporate America have been seeking such help to boost their financial flexibility.
"Regal is not under stress from debt commitments or loan maturities, our balance sheet is strong, and we are optimistic regarding the 2009 film slate," CEO Mike Campbell said. "But we believe that the current environment requires a more conservative capital strategy and that these combined actions allow the company to retain more capital for de-leveraging its balance sheet and other opportunities."
The company didn't specify whether this could mean that it might look at acquiring distressed competitors, but observers did take it as such a hint.
Knoxville, Tenn.-based Regal will now pay a quarterly dividend of 18 cents per share, down from 30 cents. This will allow the firm to save $75 million a year.