Cineworld leaves 45 thousand workers out of jobs as it closes its U.S. and U.K. theatres
- Cineworld leaves 45 thousand workers out of jobs as it closes its U.S. and U.K. theatres.
- The British cinema company says theatres are likely to reopen in two months.
- Cineworld is currently struggling with a heavy debt attributed to Regal acquisition.
Cineworld Group plc (LON: CINE) said on Monday that its movie theatres in the U.S. and the U.K. will be closed for the public once again this week, leaving close to 45 thousand workers without a job. The move is attributed to the second wave of new COVID-19 cases in both of its primary markets.
Shares of the company slid sharply by over 55% on Monday to print a record low of 18.10 pence per share. In the later hours, it recovered slightly and settled around 24 pence per share. On a year to date basis, Cineworld Group is now nearly 90% down in the stock market. Here’s what you need to know about how to choose winning stocks.
Cineworld says theatres are likely to reopen in two months
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The world’s 2nd largest cinema chain blamed the Coronavirus pandemic for pushing studios into postponing major releases, including the new James Bond movie. Consequently, the company sees no other option but to close 127 of its namesake and Picturehouse theatres in the United Kingdom, and 536 of its Regal theatres in the United States from 8th October.
According to CEO Mooky Greidinger of Cineworld, theatres are likely to be reopened for the public in roughly two months, or perhaps a little longer. The CEO said:
“From a liquidity point of view, we were bleeding much bigger amounts when we are open than when we were closed.”
Prominent titles like Wonder Woman sequel is scheduled to release on Christmas Day. The affected jobs, Cineworld said, will also include ancillary staff like security personnel and cleaners. Earlier this year, Cineworld had abandoned its £1.32 billion merger deal with Cineplex in June.
Cineworld is currently struggling with a heavy debt
The British company is currently struggling with a hefty debt attributed to Regal that it acquired in 2018. But Cineworld expressed confidence on Monday that it was exploring ways to raise new funds.
In related news, S&P warned on Friday that Cineworld’s larger U.S. competitor, AMC Entertainment was likely to run out of liquidity by March 2021 if it fails to boost its cash stature with new equity.
Cineworld performed fairly dovish in the stock market last year with an annual decline of roughly 15%. At the time of writing, the Brentford-headquartered cinema company has a market cap of £324.59 million.