Cinemark, the third-largest theater chain in the country, said that it would be selling $250 million worth of debt securities -- or senior secured notes -- for general corporate purposes and to increase liquidity as theaters remain shut down during the coronavirus pandemic, the company announced Monday.
The Plano, Texas-based exhibitor operates 554 theatres with 6,132 screens in 42 states domestically and 15 countries in South and Central America. Cinemark CEO Mark Zoradi, whose pay rose to $6.3 million in 2019, is currently going without a salary as employees remained furloughed and theaters remain closed across the country.
Cinemark added that the notes sold in the debt offering will be guaranteed by certain corporate subsidiaries. The notes are due by 2025.
"The Notes will be guaranteed by certain of the Company's subsidiaries that guarantee, assume or in any other manner become liable with respect to any of the Company's or any guarantor's other debt," the company said in a statement. "The Notes and the guarantees will be the Company's and the guarantors' senior obligations secured by a first-priority lien on certain of the Company's leasehold interests in real property."
Zoradi said in a memo to employees late last month week that while employees at the corporate level would not be laid off, no employees will make more than 50% of their salaries and will be working in a limited capacity, but with full benefits.
"Cinemark's priority as it navigates through this uncertainty is to ensure that the company will be able to once again open theaters and employ our global team members," Zoradi wrote in a memo. "I look forward to the day in the hopefully not-too-distant future when the Cinemark team can once again welcome guests to enjoy the immersive moviegoing experience we offer at our theatres."
Cinemark has had less debt than its rivals AMC or Regal and was in a more stable position. And an analyst even upgraded Cinemark's stock to a "Buy" status after the company finished the trading period last week up 11%.