Hopes for future of Cineworld in £336million debt deal

Cineworld has secured a debt of £ 336 million (450 million US dollar) to help the troubled cinema chain through the coronavirus pandemic.

The group, which has temporarily closed its UK and US offices, said it has also gained access to an additional £ 233 million ($ 310 million) in liquidity to boost its finances.

Shares rose Monday after the unveiling of the new lending facility, which expires in 2024.

Last month, Cineworld closed the doors of 633 of its cinemas, leaving as many as 45,000 workers unemployed for the foreseeable future.

It was one of several movie theater chains hit by the pandemic as movie studios push release dates of major new films, including the latest James Bond movie, No Time to Die, to 2021.

Mooky Greidinger, CEO of Cineworld, said, “In the long run, the operational improvements we have made 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 controlling our cost base.

“We look forward to resuming our business and welcoming movie fans around the world back to the big screen for an exciting and full-length series of films in 2021.”

Cineworld said it has also extended a revolving credit facility of £ 83 million, due next month, to May 2024, and has brought forward a projected tax refund of more than £ 150 million to early 2021.

Investec analysts said, “As vaccine development continues, this should give investors significantly more confidence in Cineworld emerging from the crisis, allowing the company to meet demand as it returns with a solid line of delayed films.

“While recent changes to the theatrical window by peers have made headlines from the industry, we continue to believe they will have a limited impact on the total revenue of the tills in the industry.”

Shares of the company were up 16.9% to 53.8p during early trading.