Shares in Village Roadshow continued to dive following an announcement last Friday that it would suspend payment of its stock dividend.
At the close of trading on Tuesday (June 11) the shares stood at A$1.17, down 32% compared with their A$1.72 prior to the announcement.
In a statement the company said that it has a strong balance sheet but also referred to "substantial commitments" on long-term leases for its cinema properties. The move which will save some $25m (A$44m) a year will "improve the internal reserves as well as access to external resources available to pursue inherent growth opportunities in our core business of exhibition."
Analysts said that the move signalled a need for funds to pay off debts or plans for expansion. They also pointed to its heavy production commitments to the next two episodes of The Matrix.
In March, Village announced that it was pulling out of three of its Asian exhibition markets - Thailand, India and Malaysia - as part of an ongoing rationalisation programme (Screendaily, March 14).
This week it also emerged that New Regency had replaced Village Roadshow Pictures, as a co-financier of $70m-plus Brad Pitt-Cate Blanchett vehicle The Fountain (a.k.a. The Last Man), a sci-fi epic to be directed by Darren Aronofsky.