Cineworld, the largest cinema chain in the UK, has secured financial lifelines worth $750m (£560m/€630m) and the issue of equity warrants as it continues to struggle amid COVID-19 closures and low attendances.
The company, which shuttered all its sites in the US and UK in October, 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 announcement means Cineworld, which has 128 theatres in the UK and Ireland and 536 Regal theatres in the US, said it now has enough liquidity to make it through next year – as long as cinemas are allowed to reopen by May.
Mooky Greidinger, chief executive of Cineworld, said: “The measures we are announcing today deliver over $750 million of extra liquidity to support our business. 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.”
The company said it had managed to cut rental costs after agreeing abatements and deferrals with key landlords.
The COVID-19 crisis has hit the film and entertainment industry hard, with Cineworld seeing a $1.6bn loss for the six months to June as its cinemas were forced to close as a result of coronavirus lockdowns.
Alicja Kornasiewicz, chair of Cineworld Group, added: “In light of the severe financial challenges facing the group arising from the significant disruption to the entire industry, the board is confident this additional liquidity will preserve and maximise shareholder value over the long term.”
The majority of the company’s staff have been asked to take redundancy, with possible plans to rejoin the cinema chain again once theatres reopen, which will likely be next year.