Cineworld seals debt lifeline to ride through closures
23 November 2020, 10:24
The group has secured more than £550 million in liquidity to help it after shutting its UK and US cinema sites.
Cineworld has secured a £336 million (450 million US dollars) debt lifeline to help guide the troubled cinema chain through the coronavirus pandemic.
The group, which has temporarily closed its UK and US sites, said it has also secured access to another £233 million (310 million dollars) in liquidity to boost its finances.
Shares soared on Monday after it disclosed the new lending facility, which will mature in 2024.
Last month, Cineworld shut the doors to 633 of its cinemas, leaving as many as 45,000 workers unemployed for the foreseeable future.
It was one of a raft of cinema chains to be affected by the pandemic, as film studios push back the release dates of major new movies, including the latest James Bond film, No Time to Die, to 2021.
Mooky Greidinger, chief executive of Cineworld, said: “Over the long term, the operational improvements we have put in place since the start of the pandemic will further enhance Cineworld’s profitability and resilience.
“The group continues to monitor developments in the relevant markets in which we operate and our entire team is focused on managing our cost base.
“We look forward to resuming our operations and welcoming movie fans around the world back to the big screen for an exciting and full slate of films in 2021.”
Cineworld said it has also extended an £83 million revolving credit facility, which was due to expire next month, to May 2024, and pulled forward an expected tax refund of more than £150 million to early 2021.
Analysts at Investec said: “With vaccine development progressing, this should give investors significantly greater confidence in Cineworld emerging from the crisis, allowing the company to capture demand as it returns with a robust slate of postponed films.
“Although recent changes to the theatrical window by peers have captured industry headlines, we continue to believe those will have limited impact on industry box office revenues overall.”
Shares in the company jumped by 16.9% to 53.8p in early trading.
