Cineworld Considers Temporary Closures of UK and US Cinemas
Posted on 10/04/2020
The coronavirus lockdowns have accelerated the financial demise of movie theaters in the West. Cineworld Group plc released a statement on Twitter, “We can confirm we are considering the temporary closure of our U.K. and US cinemas, but a final decision has not yet been reached. Once a decision has been made we will update all staff and customers as soon as we can.”
Cineworld is the owner of the largest chain of theaters in the U.K. and Ireland and the second-biggest in the United States (under Regal Cinemas).
The 25th James Bond film is called “No Time to Die”. The movie is being pushed back until April 2021. Many theaters were counting on the movie to help stimulate sales.
Singapore’s GIC Private Limited, along with Norges Bank Investment Management (oversees Norway Government Pension Fund Global) remains a large sovereign wealth fund investor in Cineworld. GIC bought 62 million shares of Cineworld from Global City Theatres, a proxy for CEO Moshe Greidinger and his brother deputy CEO Israel, in March 2020.
Free cash flow generation remains a concern for Cineworld and a second infection wave coupled with lockdowns could be devastating for the movie chain company.
Rival AMC
AMC Entertainment Holdings, Inc. is an American movie theater chain headquartered in Leawood, Kansas, and the largest movie theater chain in the world. In July 2020, AMC completed a debt restructuring with bondholders which resulted in US$ 200 million in fresh cash, as well as the purchase of US$ 100 million in new senior notes by the Silver Lake Group. AMC also pocketed US$ 77 million by selling nine theaters in Europe’s Baltic region. Recently, S&P Global Ratings downgraded AMC’s credit rating from CCC+ to CCC-.
