23 Nov Cineworld secures £560m cash lifelines as Covid closes cinemas
Cineworld, the world’s second-largest movie chain operator, has secured financial lifelines worth $750m (£560m) to weather the coronavirus pandemic.
London-listed Cineworld, which shut all of its 660 movie theatres in the US and the UK in October, said the financial agreements mean it has enough liquidity to make it through next year – as long as cinemas are allowed to reopen by May.
The company has agreed financial measures with lenders including a new $450m debt facility. Other agreements include a waiver on all covenants on payments on its debt – which stands at $4.9bn – until June 2022 and an extension on its $111m revolving credit facility to 2024. In addition, Cineworld has accelerated the closure of its US tax year which will generate a $200m tax refund early next year.
“The measures we are announcing today deliver over $750m of extra liquidity to support our business,” said Mooky Greidinger, the chief executive of Cineworld. “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 company said it had managed to cut rental costs after agreeing abatements and deferrals with key landlords.
Boris Johnson is expected to allow cinemas to reopen in some parts of England from 3 December. However, there is a lack of big titles scheduled for release, and fans are nervous about returning as the pandemic continues.
With movie theatres mostly shut, studios have been pulling blockbusters from theatrical release and striking deals to launch them as premium video-on-demand rentals.
“With vaccine development progressing, this should give investors significantly greater confidence in Cineworld edging from the crisis,” said Alastair Reid, an analyst at Investec. “Although recent changes to the theatrical release window by peers have captured headlines, we continue to believe those will have limited impact on industry box office revenues overall.”