One of three buyers involved in the $850m Loews Cineplex Entertainment distress sale is backing out but the remaining two partners say the bailout plan will go ahead regardless for the exhibition giant.

Pacific Capital Group revealed on Thursday that it has decided to withdraw from the bankruptcy reorganization plan proposed for North America's second largest theatre circuit. However, both its erstwhile partners, Toronto-based Onex Corp. and LA-based Oaktree Capital Management, say they intend stay the course.

PCG's withdrawal comes as Loews Cineplex announced the closure of rather more screens than previously anticipated, including as many as 500 in Canada - afigure that represents more than half of its screens in that country.

According to a Securities & Exchange Commission filing issued May 29, the company has earmarked for closure as many as 108 locations in the US (comprising 645screens), 79 locations in Canada (comprising 501 screens) and, potentially, one site each inAustria and Poland (comprising a total of 14 screens).

The regulatory filing, which included the company's fiscal year end results, shed light on what ails the company and the industry in general. Loews had 2000-1 revenues of $903.5 million, 70% of which came from box office receipts and 30% from concession sales and other revenues. Those box receipts represented 8.7% of the total North American box office.

Noting that revenue was off by approximately $27m from the previous year, the company statement blamed "a significant decline in attendance primarily due to lower industry-wide attendance levels approximately 3%) in comparison to the prior year (particularly driven by the 'sub-par' performance of the summer and fall film product) and the continued decline in attendance at many of our older theatres."