Ever the target of rumors, DCIP is said to be well on the road to obtaining a round of private equity for its first round of equipment purchases. The equity financing would come through Blackstone Group, on the order of $200M to $300M, enough to purchase 3000 systems. Assuming that their deployment agreements require 50% conversion within a complex in order to collect VPFs, and averaging 12 screens per site, that would get Regal, AMC, and Cinemark on their way towards collecting VPFs for around 500 3-D enabled sites.
No doubt DCIP has run into the same issues as other deployment entities, and will need to prove that the complex cash flow scheme works before floating its bond. While Blackstone is handling the private equity for the company, JP Morgan will be handling the debt through issue of a bond. Markets, as we all know, are not what they used to be. Blackstone and JP Morgan are probably seeking higher returns than when originally approached.
Those who think that the bond will float quickly and DCIP will be off running may be in for a disappointment. With the requirement for higher returns, recoupment stretches out, requiring a longer term for collection of VPFs. DCIP could be forced to wait further until interest rates are more acceptable. At worst, DCIP will have to ask the studios for an extension to its original rollout window. In consideration of an adequate rollout window, a side note to this is whether Sony, who will now supply equipment to both AMC and Regal, has the production capacity to support a fast rollout.
DCIP has been telling its vendors that it expects to roll early next Spring. But expectations may have to change as the realities of today’s market come into play.