IMAX starts consent solicitation for senior notes, already has 67% of needed approvals

New York, April 3 - IMAX Corp. said it has begun its previously announced solicitation of consents from holders of its senior notes to provide it with additional time to file its 10-K annual report for 2006.

The Toronto-based motion picture technology company and theater operator said that it already has 67% of the necessary approvals from bondholders.

As previously disclosed, IMAX said it will have further delays with the annual report as well as the corresponding filings under Canadian provincial securities laws, pushing them beyond the March 31 deadline.

Noteholders who consent will receive a fee of $10.00 per $1,000 principal amount for the extension to May 31 (plus applicable cure period). IMAX will have the option to extend the deadline to June 30 (plus applicable cure period) on payment of an additional fee of $5.00.

The solicitation ends at 5:01 p.m. ET on April 12.

IMAX said previously that it had already obtained a waiver under its bank credit agreement of the covenant to deliver its audited financial statements until June 30.

Management and the audit committee of the board of directors are evaluating certain accounting errors over a six-year period.

As a result, IMAX said it expects to file restated financial statements for certain periods during those years.

After receiving comments from the Securities and Exchange Commission and the Ontario Securities Commission, the company said it will broaden its review, primarily in connection with its revenue recognition for certain theater system installations in previous periods, including the fourth quarter of 2005.

IMAX said that it and its auditors, Pricewaterhouse Coopers LLP, may determine that it is necessary to restate additional items beyond the previously identified errors.

The company added that it does not believe that a potential restatement resulting from changes to its revenue recognition accounting would have any impact on its previously reported or existing cash accounts.

IMAX noted that it cannot predict when it will complete this review and file its 10-K, adding that it does not believe its operations will be impacted by any delays in filing.

In addition, the company expects to receive a notice of delisting from Nasdaq as a result of the delayed filing.

Global Bondholder Services Corp. is information agent and tabulation agent for the solicitation (866 857-2200) or (212 430-3774). Credit Suisse is solicitation agent (contact Liability Management Group at 212 325-7596).

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