Cineworld secures $250m in debt as it prepares to reopen cinemas

Company suspended dividend with executive directors deferring their salaries

Cineworld expects to reopen on July 10th in most markets

Cineworld expects to reopen on July 10th in most markets

 

Cinema operator Cineworld said on Monday it secured a $250 million debt facility from a group of private institutional investors as it gears up to reopen theatres following the easing of coronavirus-led lockdowns globally.

The move comes after the company abandoned its $1.65 billion take over of Canada’s Cineplex earlier this month, a deal that had raised concerns about Cineworld’s growing debt pile, which stands at $3.5 billion.

Cineworld, which expects to reopen in the US and the UK on July 10th, said the new facility, along with covenant amendments and a $110 million increase in revolving credit facility, helped add more heft to its balance sheet.

The Regal cinema owner operates about 9,500 screens globally, with more than 7,000 in the United States.

As part of its reopening plan, the company said last week that it would put in place additional cleaning and social distancing measures to try to reassure film fans before high-profile summer releases including director Christopher Nolan’s thriller Tenet and Walt Disney’s action epic Mulan.

The world’s largest movie theatre operator AMC Entertainment Holdings plans to reopen 450 theatres in the United States on July 15th, and the remaining 150 theatres in the country in time for the opening of “Mulan” on July 24th and Christopher Nolan’s “Tenet” on July 31st.

Cineworld, which closed its cinemas globally three months ago, said in April it was suspending its dividend and that executive directors were deferring their salaries in an attempt to save costs.

It has also secured credit committee approval to apply for an extra $45 million through a coronavirus borrowing scheme in the UK in May and is looking to access $25 million through the US government CARES Act.

- Reuters