Regal Cinemas Owner Cineworld Expands Liquidity by $750 Million

Majority of that comes from new $450 million debt facility

Last Updated: November 23, 2020 @ 7:21 AM

Regal Cinemas owner Cineworld has set a new $450 million debt facility, which will help the movie exhibitor stay afloat amid the ongoing coronavirus pandemic. Combined with extensions in the maturity dates of previously existing debt and the acceleration of a big tax refund, Cineworld has lined up more than $750 million in new liquidity.

Cineworld will issue its new lenders 153,539,786 equity warrants. That accounts for 9.99% of the company’s shares, assuming the warrants are fully exercised.

Counting the $450 million, Cineworld’s aggregate gross financed debt is now $4.9 billion with an average interest rate of 4.5%.

Cineworld has also renegotiated with its landlords and banks, which will cut monthly costs until hopefully the world is back to normal. An extension of the maturity for a previously existing revolving credit facility (RCF) from December 2020 to May 2024 will keep $111 million with the company for now.

The renegotiations of lease agreements will help the company save $60 million in monthly costs. Cineworld expects an early tax refund of $200 million.

In planning this all out, Cineworld is operating under the assumption that theaters will reopen by May 2021 at the latest.

“Cineworld believes that together these steps will provide the group with financial and operational 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,” the company said in a statement.

In light of the severe financial challenges facing the Group arising from the significant disruption to the entire industry, the Board is confident this additional liquidity will preserve and maximise shareholder value over the long term,” Alicja Kornasiewicz, chair of Cineworld Group PLC, added.

“The measures we are announcing today deliver over $750m of extra liquidity to support our business,” Cineworld CEO Mooky Greidinger said. “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. The group continues to monitor developments in the relevant markets in which we operate and our entire team is focused on managing our cost base. We look forward to resuming our operations and welcoming movie fans around the world back to the big screen for an exciting and full slate of films in 2021.”