Cineworld looks to raise debt cap after $3 bn loss

LONDON: 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 US 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 per cent 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. — Reuters