Thursday, 21 Oct 2021

Cineworld looks to raise debt cap after $3 billion loss in 2020

FILE PHOTO: People walk past a Cineworld in Leicester’s Square, amid the coronavirus disease (COVID-19) outbreak in London, Britain, October 4, 2020. REUTERS/Henry Nicholls

(Reuters) -Cineworld said on Thursday it will ask shareholders to approve a raise in its debt ceiling next month to allow it to borrow more money to shore up its shattered finances after reporting a $3 billion loss for 2020.

The Regal owner, forced by the coronavirus lockdowns to shut most its nearly 800 theatres last October temporarily leaving 45,000 out of work, suffered a pretax loss of $3.01 billion last year, its first ever loss as a listed company, compared to a profit of $212.3 million a year earlier.

The company, which is set to reopen its U.S. chains next month armed with a recently-agreed exclusivity deal with Warner Bros, said it has secured commitments for a new $213 million convertible bond to safeguard itself from a further hit due to the health crisis.

“Strong pent-up demand for affordable out-of-home entertainment anticipated post re-opening due to the COVID-19 pandemic as indicated by the theatrical industry performing well in re-opened markets such as China, Japan and Australia,” Cineworld said.

But the London-listed company added that material uncertainty around its ability to continue as a going concern remained, as it reported an 81% plunge in 2020 revenue to $852.3 million.

Cinema operators, devastated by empty halls during the lockdowns, are also challenged by the growing shift to streaming services and lower content due to disruptions to film-making.

2021 could be better for the industry as a whole as big-budget movies such as Marvel’s superhero film “Black Widow,” the James Bond movie “No Time to Die” and “Godzilla vs. Kong” are set to see their day on the big screen.

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