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Orion Sells Megabox Cinema Chain

2007/07/19 | 469 views | Permalink | Source

Megabox, one of Korea's top three multiplex chains has been sold to a group of foreign investors. The group, led by Australian banking consortium Macquerie Funds, bought all of Megaplex's 2.93 million shares from Mediaplex Inc., an affiliate of the Orion Group conglomerate. The purchase, announced July 18th, makes it the first Korean theater chain to be entirely foreign-owned, raising concern for many in the already shaken local film industry.

Megabox, which operates 155 screens at 19 venues nationwide, saw a drop in profits this year as competitors CJ-CGV and Lotte Cinemas expanded and nationwide ticket-sales decreased. Megabox opened its first theater in May 2000 at the Seoul COEX mall, which went on to become the busiest multiplex in the world.

The US$156.5 million sale bolsters rumors that Orion Group would scale back its film divisions to focus on broadcasting. Concern over the future of Mediaplex and its investment and distribution arm Showbox has grown, but Mediaplex spokesperson KIM Tae-seong asserted that the company 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". With a newly launched production division called Motion 101, Showbox plans 4 to 5 in-house productions per year, along with more investment in big-budget films.

The Australian-led foreign buyers, under the consortium title Korea Multiplex Investment Corporation (KMIC), will assume management rights over Megaplex, but in a two-year agreement with Mediaplex, the latter will continue to operate the cinema chain until July 2009 in return for $US10.8 million plus incentives.

Nigel D'Sa (KOFIC)

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