Cinemas chain Cineworld (CINE) saw its share price storm higher after the company said it expected to reopen all of its cinemas by July, and struck a deal with its lenders to ease the terms of its borrowings.
The news saw the stock jump more than 20% to 93.66p, heights not seen since before the Covid-19 outbreak that forced cinemas to close across the world.
Lenders agreed to waive the leverage covenant in respect of Cineworld’s credit facility for the June 2020 testing date and had increased its leverage covenant to nine times net debt to earnings before interest, tax, depreciation and amortisation (EBITDA) for the December 2020 testing date, the company said.
NEW DEBT DEAL
Cineworld has also agreed terms for an extra $110m lending facility to help ease liquidity concerns, through an increase in its revolving credit facility.
‘Cineworld expects that this additional liquidity, to the extent required, will provide it with sufficient headroom to support the group even in the unlikely event cinemas remain closed until the end of the year,’ said the company.
The movie line up to follow the reopening of cinemas, would start with the new Chris Nolan movie Tenet and immediately be followed by Mulan, a new Disney adventure movie.