British cinema operator Cineworld said on Tuesday it has shut all its 787 cinemas across 10 countries due to the coronavirus pandemic and that it was in talks with its lenders for ongoing liquidity requirements.
Cineworld, the world’s second-largest cinema operator, said it has suspended dividend payment for the fourth-quarter as well as upcoming 2020 quarterly dividends and that it is also in talks with its landlords, film studios and suppliers to mitigate the impact of the closures.
United States, the company’s biggest market with more than 500 cinemas where it generates three quarters of its revenue, has by far seen the most confirmed virus cases at more than 355,000, with deaths exceeding 10,000.
The company said it was monitoring the progress of its $1.65 billion takeover of Canadian rival Cineplex, a deal that had led Cineworld to take on additional financing of about $2.2 billion, triggering concerns about its debt pile.
Cineworld said last month it could fail to meet its debt commitments in a worst-case coronavirus scenario where its cinemas would be shut for up to three months. Its debt stands at $3.5 billion, excluding leases and the additional financing of Cineplex.
Its combined credit score, which measures how likely a company is to default in the next year on a scale of 100 (very unlikely) to 1 (highly likely), was “1,” Refinitiv Eikon data showed.
“We welcome the emergency support programmes to protect jobs and business that have been announced in our markets and will access them as appropriate,” Cineworld said, adding that the closures were “impossible to imagine a few months ago.”
The company said its executive directors voluntarily agreed to defer payment of their salaries and bonuses and that its non-executive directors will also defer their fees. It is also curtailing all “unnecessary” spending.
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