Carmike Lenders Halt Junk Bond Payment
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Carmike Cinemas Inc., struggling in the overbuilt U.S. theater market, said Wednesday that its senior lenders blocked an interest payment of about $9 million due to holders of the firm’s junk bonds.
That sent the stock (CKE) down $1.75 to a record low of $1.50 on the New York Stock Exchange.
But the company insisted that it will be able to pay its debt for the next year to 24 months. “We are not currently experiencing liquidity problems,” Carmike said.
The firm said it would explore all its capital options.
“It’s one more signpost of how stressed the movie theater sector is and how worried lenders are,” said Bishop Cheen, analyst at First Union Securities.
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