New Financing Agreements Boost IMAX Stock

IMAX Corp. (IMAX) shares got a boost Tuesday morning after the company announced two new financing arrangements to help fund its digital projection roll-out slated for this summer.

Wachovia Capital Finance Corporation has agreed to extend the term of IMAX current credit facility to October 31, 2010, and also remove an EBITDA maintenance covenant provided IMAX maintains certain minimum liquidity requirements.

Meanwhile, the Douglas family, IMAX's largest shareholder, has agreed to buy approximately 2.73 million common shares in a private placement at an aggregate purchase price of C$18-million.

IMAX co-chairmen and co-CEO's Richard L. Gelfond and Bradley J. Wechsler said:

We have always believed that the attractive returns from existing joint ventures would enable us to finance our broader digital rollout.

Now our bank and our largest shareholder have each stepped forward to provide us with increased availability of credit and cash, which we believe will enable us to effectively execute on our existing plan. Coupled with our cash on hand, we expect that these deals will ultimately provide us with access to roughly C$55 - C$60 million in funding.