Cinema giant Cineworld, whose operations also include Regal cinemas, warned on Wednesday that “despite a gradual recovery in demand since reopening in April 2021” following COVID-related theater closures, “recent admission levels have remained below expectations”.
It added: “These lower admission levels are due to a limited film slate expected to continue through November 2022 and expected to negatively impact the group’s trading and liquidity position in the near term.”
As a result, the debt-laden company said it has “taken proactive steps to ensure it has the balance sheet strength and flexibility to adapt to market conditions.” This includes “key previously disclosed operational and financial initiatives to control costs and improve liquidity,” which Cineworld said were “necessary to support its ability to maximize business value as part of the cinema industry recovery.”
In connection with these initiatives, the exchange giant said it also “remains in active discussions with various stakeholders and is evaluating various strategic options to both obtain additional liquidity and potentially restructure its balance sheet through an extensive deleveraging transaction.” In this context, it also warned, “Any deleveraging transaction is likely to result in a very significant dilution of existing equity stakes in Cineworld.”
However, the group’s business is “expected to remain unaffected,” the company said. “Cineworld will continue to welcome guests to its cinemas in its global markets as normal, without disruption.”