Cineworld secures cash bailout to weather coronavirus closures
Cineworld has secured a financial lifeline worth £560 million following closures of its cinemas due to the coronavirus pandemic.
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The chain temporarily suspended its operations in the UK and US last month, shutting down all its theatres in the two countries and putting thousands of jobs at risk.
However, a new financial agreement has been confirmed, meaning that the company has enough money to make it through 2021, pending on cinemas reopening by May (via The Guardian).
The measures agreed with lenders include a £338 million debt facility, as well as a waiver on all covenants on payment of its debt until June 2022. Additionally, it will allow an extension to 2024 on its £83 million revolving credit facility, and will get a tax refund of £150 million by accelerating the closing of its US tax year.
The company has revealed that it has managed to cut rental costs by agreeing abatements and deferrals with key landlords. It comes after it was reported that Cineworld could face cinemas closures as part of a rescue deal.
“The measures we are announcing today deliver over $750m of extra liquidity to support our business,” said Cineworld chief executive Mooky Greidinger following the news of the financial lifeline.
“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.”
Cineworld previously reported a huge loss for the first six months of 2020 due to temporary closures as well as the delay of blockbuster releases such as James Bond film No Time to Die, which has now been pushed back to next spring.