Astoria Cinemas granted reprieve
Crisis-hit Astoria Cinemas has stopped paying its old debts and has applied to the Stockholm district court for bankruptcy protection and leave to restructure its operations.
The cinema chain will start paying incoming bills from today, it said.
"The corporate restructuring is part of the solution to Astoria Cinemas' current situation and its future," the company said in a statement on Tuesday.
"The other part, which involves a capital injection, will be presented on thursday afternoon. We can therefore guarantee a secured future for Astoria Cinemas," the statement continued.
Astoria Cinemas owes the Swedish Film Institute 7 million kronor in unpaid feed. The institute has applied to the Swedish Enforcement Administration for a payment order to be served on the company for 7.1 million kronor.
"The reason that Astoria Cinemas has ended up in this situation is that the company has had too little capital," said lawyer Staffan Cassmer, who has been appointed by the court to oversee the company's restructuring.
"High renovation costs for the cinemas and too few big films in its repertoire have hit the company's finances," he said-
The company's prioritised creditors are owed 20-25 million kronor. The unprioritised creditors are owed 57 million.
A company that is given bankruptcy protection and permission to restructure is protected from creditors as long as the official overseeing the restructuring is satisfied that there are good conditions for the company to continue operating.
"Usually, these conditions are not good, but in this case they are," said Casmer.
"The company now has a good income from ticket sales and we are going to start negotiating immediately with both the prioritised and non-prioritised creditors," he said.
The restructuring means that Astoria Cinemas will stay in business for the time being.
"I know that there are ideas about bringing a co-financer into the company," said Cassmer.
Astoria was granted leave in March to stop paying a monthly fee of ten percent of its profits to the Swedish Film Institute. This raised the hackles of Astoria's competitors, which complained of unfair treatment.
Competitor SF Bio had wanted to buy the Sandrews cinema chain from Norwegian media giant Schibsted last spring, but it was stopped by the Swedish Competition Authority on the grounds that this would give it too dominant a position on the market. The company was then sold to Triangelfilm, which later changed its name to Astoria Cinemas.
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The cinema chain will start paying incoming bills from today, it said.
"The corporate restructuring is part of the solution to Astoria Cinemas' current situation and its future," the company said in a statement on Tuesday.
"The other part, which involves a capital injection, will be presented on thursday afternoon. We can therefore guarantee a secured future for Astoria Cinemas," the statement continued.
Astoria Cinemas owes the Swedish Film Institute 7 million kronor in unpaid feed. The institute has applied to the Swedish Enforcement Administration for a payment order to be served on the company for 7.1 million kronor.
"The reason that Astoria Cinemas has ended up in this situation is that the company has had too little capital," said lawyer Staffan Cassmer, who has been appointed by the court to oversee the company's restructuring.
"High renovation costs for the cinemas and too few big films in its repertoire have hit the company's finances," he said-
The company's prioritised creditors are owed 20-25 million kronor. The unprioritised creditors are owed 57 million.
A company that is given bankruptcy protection and permission to restructure is protected from creditors as long as the official overseeing the restructuring is satisfied that there are good conditions for the company to continue operating.
"Usually, these conditions are not good, but in this case they are," said Casmer.
"The company now has a good income from ticket sales and we are going to start negotiating immediately with both the prioritised and non-prioritised creditors," he said.
The restructuring means that Astoria Cinemas will stay in business for the time being.
"I know that there are ideas about bringing a co-financer into the company," said Cassmer.
Astoria was granted leave in March to stop paying a monthly fee of ten percent of its profits to the Swedish Film Institute. This raised the hackles of Astoria's competitors, which complained of unfair treatment.
Competitor SF Bio had wanted to buy the Sandrews cinema chain from Norwegian media giant Schibsted last spring, but it was stopped by the Swedish Competition Authority on the grounds that this would give it too dominant a position on the market. The company was then sold to Triangelfilm, which later changed its name to Astoria Cinemas.
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