Belgian multiplex operator Kinepolis has announced that it plans to give up its 25% stake in CinemaxX, after the German exhibitor issued a profit warning to shareholders at the end of last week.
In a statement Kinepolis declared that: "the importance of this interest had been put into question for some time due to the continuously bad results CinemaxX had reported", and indicated that its stake will be sold at a later point when the share price has recovered.
During trading on December 9, CinemaxX's shares slipped to Euros4.60, a far cry from the level of Euros34 which Kinepolis had paid per share when it came on board the company in February 1999.
CinemaxX had told shareholders that it would report a "two digit million mark loss" for the first six months of the current financial year (July-Dec 2000) due to unexpectedly low cinema admissions over the last few months.
The company said it had "firmly assumed that the traditionally over-proportionally good cinema month of November would recompense for the drop in admissions in October". However, November ticket sales fell below even the traditionally weak month of July.
CinemaxX said it would scale back its expansion plans to improve its financial results. Meanwhile, producer-distributor Senator Entertainment, which acquired more than 25% of CinemaxX in May, announced an "exclusive co-operation agreement" with the company, which is expected to mean a more hands-on involvement in its operations.