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Cineworld gets US$750mln lifeline as banks agree new loan

Published: 08:44 23 Nov 2020 GMT

Cairn Energy PLC -

Cineworld Group PLC (LON:CINE), the ailing cinema chain, has arranged additional bank facilities of US$450mln to keep it afloat until next May.

The loan is part of a package of measures worth S$750mln in total that will keep Cineworld going at least until lockdown restrictions are eased and studios release blockbusters back into cinemas, the group said.

The group added that its base case scenario for the new finance assumes a reopening of cinemas no later than May 2021.

As part of the new financing, covenant waivers on bank debt until June 2022 have been also agreed, an existing US$111mln bank facility extended until 2024 and the tax year changed to get a US$200mln refund early in 2021.

Cineworld said it had also agreed rent cancellations and deferrals with key landlords, which has reduced monthly cash expenditure to US$60mln while its cinemas are shut.

Doubts about the world's second-largest cinema chain’s survival grew last week on reports it was looking at a company voluntary arrangement (CVA).

In a statement, Mooky Greidinger, Cineworld's chief executive, said: "The measures we are announcing today deliver over US$750mln of extra liquidity to support our business. 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.

“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."

As part of the US$450mln loan, Cineworld’s lenders have been granted warrants equal to 9.99% of the company’s equity.

With the new US$450mln debt, Cineworld’s loan facilities rise to US$4.9bn at an average interest rate of 4.5%.

Shares in the company, which was one of the most shorted on the London market, jumped 19% to 54.8p

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