Cineworld may need more money if doors close again

Cin­ema op­er­a­tor fears re­newed virus re­stric­tions as studios de­lay ma­jor re­leases

Arab News - - Business News - Reuters London

Cineworld said on Thurs­day it might need to raise more money if it is re­quired to shut its the­aters again fol­low­ing fresh pan­demic curbs, as the world’s sec­ond-big­gest cin­ema op­er­a­tor swung to a firsthalf loss, send­ing its shares down 17 per­cent.

The Bri­tish com­pany, for which the US is the largest mar­ket, said it was in talks with lenders to avoid an im­pend­ing loan de­fault, and flagged risks to its abil­ity to con­tinue as a “go­ing con­cern” as studios de­lay ma­jor re­leases and peo­ple stay away from the­aters.

“If gov­ern­ments were to strengthen re­stric­tions on so­cial gath­er­ing, which may there­fore oblige us to close our es­tate again or fur­ther push back movie re­leases, it would have a neg­a­tive im­pact on our fi­nan­cial per­for­mance and likely re­quire the need to raise ad­di­tional liq­uid­ity,” the com­pany said.

Cineworld shares were down 17.5 per­cent at 42.3 pence in early trade.

New curbs could be a ma­jor set­back af­ter the cin­ema chain re­opened 561 of its 778 sites. It had high­lighted the strong per­for­mance of Christo­pher Nolan’s “Tenet” ear­lier this month, and had said it was look­ing for­ward to other big movie re­leases.

But Walt Dis­ney on Wed­nes­day post­poned the re­lease of su­per­hero movie “Black Widow” and Steven Spiel­berg’s “West Side Story” un­til 2021 in an­other set­back to cin­ema op­er­a­tors. “Mu­lan” also skipped most the­aters and went di­rectly to Dis­ney’s stream­ing plat­form.

The world’s largest cin­ema chain, AMC, and Com­cast Corp’s Uni­ver­sal Pic­tures agreed in July that the stu­dio’s movies would be made avail­able to US au­di­ences at home af­ter just three week­ends in cin­e­mas.

Cineworld Chief Ex­ec­u­tive Of­fi­cer Mooky Grei­dinger, how­ever, said his com­pany would fol­low the usual route.

“Our pol­icy re­gard­ing the the­atri­cal win­dow re­mains un­changed as an im­por­tant part of our busi­ness model, and we will con­tinue to only show movies that re­spect it,” he said in a state­ment.

The cin­ema op­er­a­tor posted a pre­tax loss of $1.64 bil­lion for the six months ended June 30, from a profit of $139.7 mil­lion last year as its cin­e­mas were shut from mid-March un­til Au­gust.

New curbs could be a ma­jor set­back af­ter the Cineworld chain had re­opened 561 of its sites around the world. Reuters

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