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Megabox, one of Korea's three major cinema chains, has been sold to a foreign investment group.
Mediaplex Inc., an affiliate of Orion Group, said Wednesday that it sold all its 2.93 million shares of its subsidiary Megabox to Korea Multiplex Investment Corporation (KMIC), led by Australian banking group Macquarie Funds. The purchase price was W145.5 billion.
Under the agreement, Mediaplex will hand over management rights of Megabox to KMIC but will continue to operate the chain until July 2009 in return for W10 billion and additional incentives.
News of the sale of Megabox, a leading nationwide theater chain along with CGV, sent shock waves through Korea's film industry.
Amid talk of screen saturation, experts believe the film industry, which suffered a severe slump last year, is in the midst of a serious shakeup.
Korean Film Council statistics show there are 1,847 screens in the country last year, more than double the 818 in 2001. Yet moviegoer numbers had been stagnant and began to decline this year.
CJ CGV says 72 million people bought movie tickets in the first half of this year, down 10.8 percent year on year. It's the first drop in ten years.
There were rumors in recent months that Orion Group would scale back its theater and film industry exposure and focus on broadcasting. Some experts say now may be the best time to sell Korean cinemas.
But Megabox official Kim Tae-seong said, "Mediaplex's official stance is that it will strengthen its core capacity in content rather than hardware through specialization and segmentation. Our position remains the same regarding investment in and distribution of Korean films, and the proceeds from the sale will be used for new film project investment."
Megabox opened its first theater in May 2000 at Seoul's COEX convention center. It quickly expanded to 155 screens nationwide to become one of the three major multiplex operators, alongside CJ CGV and Lotte Cinema.
(englishnews@chosun.com )
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