Cineworld secures a £201 million debt facility from private institutional investors

Cineworld (LON: CINE) revealed to have secured a debt facility worth £201 million from private institutional investors. The British cinema operator is currently preparing to reopen its countrywide theatres for the public as the government starts to ease the COVID-19 restrictions that halted operations in recent months.

Shares of the company are currently 2% down on Monday. The £1.06 billion company is about 65% down year to date in the stock market and has a price to earnings ratio of 7.28.

Cineworld withdrew from its £1.33 billion deal to buy Cineplex

The news comes only weeks after Cineworld withdrew from its £1.33 billion deal to buy Canada’s Cineplex that could have made it the largest cinema operator in North America. The announcement earlier this month had fuelled concerns about the cinema chain’s increasing debt pile that currently stands at £2.82 billion.

According to the world’s 2^nd largest cinema operator, its theatres will be reopened in the U.S. and the U.K. on 10^th July. The new facility, the company added, along with the agreed-upon adjustments and an increase of £88.59 million in its existing revolving credit line, offered sufficient support for its balance sheet. Learn more about the basics of a balance sheet.

Owner of the Regal cinema currently operates roughly 9,500 screens worldwide. Over 7,000 of these are in the U.S.

The company also invoked confidence in a statement last week that it will ensure social distancing and deploy additional cleaning measures in line with the public safety guidelines laid out by the health authorities. Cineworld wishes to resume operations before the release of highly anticipates titles like Wald Disney’s Mulan and Christopher Nolan’s Tenet.

AMC plans on reopening the U.S. theatres in July

Cineworld’s larger rival, AMC Entertainment Holdings, also said in a statement last week that 450 of its U.S. theatres will be reopened for the public on 15^th July. The remaining, it added, will resume operations before 24^th July.

The Brentford-headquartered company temporarily shut down its cinemas in March to help minimise the fast spread of the Coronavirus. In April, the company announced to have suspended its dividend to cushion the economic blow from COVID-19. Its executive directors had also agreed to a defer salaries for a few months to further boost cost saving.

In the United Kingdom, Cineworld secured access to £36.24 million under the COVID-19 borrowing scheme. It is currently seeking access to another £20.13 million via the U.S. government CARES act.