Cineworld secures $250 million in debt as it prepares to reopen theaters

A Cineworld cinema logo is pictured in Canary Wharf in London, Britain

British cinema operator Cineworld said on Monday it secured a $250 million debt facility from a group of private institutional investors as it gears up to reopen theatres following the easing of coronavirus-led lockdowns globally.

The move comes after the company abandoned its $1.65 billion take over of Canada’s Cineplex earlier this month, a deal that had raised concerns about Cineworld’s growing debt pile, which stands at $3.5 billion.

Cineworld, which expects to reopen in the United States and the UK on July 10, said the new facility, along with covenant amendments and a $110 million increase in revolving credit facility, helped add more heft to its balance sheet.

The Regal cinema owner operates about 9,500 screens globally, with more than 7,000 in the United States.

As part of its reopening plan, the company said last week that it would put in place additional cleaning and social distancing measures to try to reassure film fans before high-profile summer releases including director Christopher Nolan’s thriller “Tenet” and Walt Disney Co’s action epic “Mulan”.

The world’s largest movie theater operator AMC Entertainment Holdings Inc plans to reopen 450 theaters in the United States on July 15, and the remaining 150 theaters in the country in time for the opening of “Mulan” on July 24 and Christopher Nolan’s “Tenet” on July 31.

Cineworld, which closed its cinemas globally three months ago, said in April it was suspending its dividend and that executive directors were deferring their salaries in an attempt to save costs.

It has also secured credit committee approval to apply for an extra $45 million through a coronavirus borrowing scheme in the UK in May and is looking to access $25 million through the U.S. government CARES Act.

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