Multinational cinema chain Cineworld witnessed a significant surge in the value of its shares on Monday after an announcement that it had gotten new loans worth $450 million and waivers for its debt covenants until January 2022.
Additionally, Cineworld made public that it will issue equity warrants worth around 11% of its share capital, and that its new debt measures means that it now has over $750 million in extra liquidity and can reduce its monthly cash spend to around $60 million.
The company also extended the maturity of its $111 million incremental revolving credit facility from December 2020 to May 2024.
Cineworld is the world’s second-largest cinema chain and it saw its share value increase by almost a fifth after securing debt-relief measures.
Mooky Greidinger, CEO of Cineworld Group said: “over the long term, the operational improvements we have put in place since the start of the pandemic will further enhance Cineworld’s profitability and resilience. The group continues to monitor developments in the relevant markets in which we operate and our entire team is focused on managing our cost base.”
Cineworld has been strongly affected by the COVID-19 pandemic, as the restrictions imposed by several governments to stop public gatherings forced it to close its theatres and make heavy layoffs.
This new debt relief had a positive impact on Cineworld shares, raising it by 19.5% in early trading – up to 55.08 pence per share. The group saw a high of £2.27 per share last year, but has since since fallen by 77% since the onset of the COVID-19 pandemic.
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