Village Roadshow to Sell Its Stake in Singapore Cinema Chain for $130M
The Australian production, distribution and exhibition group will sell to its joint venture partner in the chain, Orange Sky Golden Harvest Entertainment.
Australia’s Village Roadshow said Monday it has agreed to sell its 50 percent stake in Singapore exhibitor Golden Village to its joint venture partner, Hong Kong-based Orange Sky Golden Harvest Entertainment, for AUS$165 million ($130 million).
In a statement to the Australian Securities Exchange, Village Roadshow said it would get $117 million after tax from the sale.
"The proceeds of the sale will initially be used to reduce VRL’s debt levels, while allowing VRL to progress its previously announced growth strategies," the company said.
The company owns theme parks and cinemas in Australia, a related film distribution business, cinemas in Asia and the U.S. and Village Roadshow Studios, as well as a stake in the Village Roadshow Entertainment Group, the holding company for production firms Village Roadshow Pictures and Village Roadshow Pictures Asia.
Golden Village is the largest exhibitor in Singapore with a market share of 44.5 percent, the companies said. Village Roadshow reported in August in its full fiscal-year results through May 31 that its share of earnings before interest, taxes, depreciation and amortization for Golden Village was $6.6 million. "This was a strong result as uncertain economic conditions saw Singapore’s box office industry decline 6.8 percent," the company said at the time.
Back then, Village Roadshow also said that it was still in talks to sell its stake in Golden Village to mm2Asia for $136.6 million after announcing the planned deal in May. The sale to Orange Sky means that the original deal, which had stalled in August, will not proceed.
The transaction is expected to be completed before the end of the year.