Shares in global cinema group Cineworld (CINE) tanked 30% to 27p on Monday after the company announced the temporary suspension of all of its 127 Picturehouse theatres in the UK and 536 Regal theatres across the US from Thursday 8 October.
The tipping point seems to have been the closure of theatres in key markets such as New York, which remain closed without any guidance of when they will reopen, which has elicited reluctance among big film studios to release their pipeline of new movies.
Today’s news follows quickly on the heels of the company floating the prospect of raising additional funds when it reported its interims on 24 September, should further government restrictions be introduced.
Mooky Greidinger, CEO of Cineworld, commented: ‘Cineworld will continue to monitor the situation closely and will communicate any future plans to resume operations in these markets at the appropriate time, when key markets have more concrete guidance on their reopening status and, in turn, studios are able to bring their pipeline of major releases back to the big screen.’
Russ Mould, investment director at AJ Bell, said: ‘Cineworld was loaded up with debt going into the crisis and now it seems inevitable that it will have to raise a substantial amount of money to help it continue servicing debt.
‘There are several other big-name films scheduled for release over Christmas which could be a big enough draw, suggesting that Cineworld may only have to wait a few months. However, studios are going to be very nervous about risking a release in this climate and if James Bond can be delayed then so can other releases.’
