Sky City offers to underwrite Force issue

By Phil Boeyen, ShareChat Business News Editor

Monday 29th October 2001

Entertainment company, Force (NZSE: FOR), is planning a one for five rights issue to raise $31 million as part of a wider recapitalisation programme.

Majority shareholder, casino operator Sky City (NZSE: SKC) is supporting the rights issue and has also offered to be the underwriter.

"We are pleased the substantive issues surrounding the restructuring of Force Corporation have been resolved and that a re-capitalisation of that business can now occur," says Sky City MD Evan Davies.

"We are supportive of the Force Corporation business plan and its primary focus on the core New Zealand and Fijian cinema operations. The new financing arrangements will ensure that Force has sufficient funding in place to meet both its operational requirements and capital expenditure programme going forward."

The recapitalisation is allowing Force to settle a long-running dispute with MTM Funds Management over the Force Entertainment Centre in Auckland's Queen Street

"The parties have agreed to settle the dispute with Force repaying the $50 million loan and paying a further $3 million in full and final settlement of all disputes in respect of the centre," Force says.

Force says it has also negotiated a three-year facility for its New Zealand and Fijian operations with ANZ Bank, which will be used for general operational requirements and to partially fund the settlement of the dispute with MTM.

The company's Argentinian business, Village Cinemas S.A, has negotiated an arrangement with the ANZ to refinance its existing US$71 million medium-term floating rate notes held by a syndicate of international banks.

Force expects to complete the rights issue before the end of January next year.

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