Theater Operator Asks Bankers for Help

DENVER —  United Artists Theatre Group, a major U.S. movie theater operator, said it is in talks with a group of bankers to avoid a default on its loan agreement, which it blames on a decline in movie attendance in the first quarter that hurt cash flow.

The Denver-based company, which operates 2,129 screens at 309 locations, said it does not expect to be in compliance with some loan covenants as of Aug. 30 and it is seeking a waiver or amendment from its bank group.

The group’s parent company, closely held United Artists Theatre Co., had about $717.8 million in debt outstanding as of June 1, according to a Securities and Exchange Commission filing. United Artists Theatre Co. is 88% owned by affiliates of Merrill Lynch Capital Partners Inc., a unit of New York-based securities firm Merrill Lynch & Co.

United Artists Theatre Co.’s first-quarter revenue declined 17.9% because of lower overall industry attendance. The company responded by closing or selling 118 screens in 22 unprofitable locations, generating $4.8 million.

United Artists said Wednesday that second-quarter revenue for its parent company rose 8.1% to $167.5 million from $155 million a year earlier. United Artists Theatre Co.’s loss narrowed to $18.7 million from $30.9 million in the year-ago quarter.