Regal will try balancing act
EmptyRegal Entertainment Group is cutting its quarterly dividend by 40% as it manages its finances carefully during the recession and 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 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 that could mean it might look at acquiring distressed competitors, but observers took it as such a hint.
Knoxville, Tenn.-based Regal will pay a quarterly dividend of 18 cents a share, down from 30 cents. That will allow the firm to save $75 million a year. (partialdiff)