Regal cinema chain operator Cineworld Group has managed to avoid bankruptcy and secured a lifeline – securing a new debt facility of $450 million according to The Wall Street Journal.
In addition, lenders will provide additional flexibility on the company’s revolving loan and other senior debt. According to Mooky Greidinger, CEO of Cineworld, these measures “deliver over $750 million of extra liquidity to support our business”.
Alicja Kornasiewicz, chair of Cineworld Group, says: “the board is confident this additional liquidity will preserve and maximize shareholder value over the long term.”
Basically the move allows Regal, the last of the major chains in North America that has held out from signing up to a Premium VOD deal, to carry on for some time yet even as the group’s cinemas will remain closed until 2021.
Assuming a reopening of cinemas no later than May 2021, the company expects to have “sufficient liquidity for 2021 and beyond”. If cinemas stay closed longer, it may require more lender support by next Fall.
This is helped by Cineworld securing long-term rent deferrals with some of its key landlords and has new lease agreements in places at certain locations – bringing down its monthly cash burn to around $60 million while cinemas remain closed.
Greidinger says the new funds give them “the flexibility until lockdown restrictions in key jurisdictions are eased and studios are able to bring their enhanced pipeline of major releases back to the big screen.”
