Cineworld says it is considering the ability to raise money on Wall Street through a stock market listing as it looks to recover from massive losses during the coronavirus crisis.
The company, which is the second-largest cinema chain in the world behind AMC, said it was looking at the possibility of a group listing or an effective spin-off of its US Regal brand, bought in 2018, which accounts for the bulk of its business.
Cineworld revealed the plan alongside its financial results for the first half of the year which showed net debt had almost reached £8.5bn (£6.1bn) and that it had cash of $436.5m (£316m) available – aided by a recent $200m loan.
The company decided in October 2020 to shut down screens in the UK and US, blaming tightening COVID-19 restrictions after studios delayed major box office releases including the new James Bond movie No Time to Die.
Image: Cineworld has more than 500 Regal-branded cinemas in the United States. Pic: APIts 45,000 staff were offered redundancy, furlough or unpaid leave at that time.
AdvertisementThe financial statement showed it was continuing to burn through cash in the run-up to June, by when its estate had completely reopened following the end of lockdowns.
It said the rate stood at an average $45m (£32.4m) per month between January and June.
More from Business COVID-19: Economy grows by 4.8% in second quarter as post-lockdown reopening drives spending spree COVID-19: Sunak faces spending test ahead as economy still lags pre-crisis level Facebook could be forced to sell GIF library Giphy after investigation by UK competition regulator Boohoo to create 5,000 jobs as part of five-year investment plan COVID-19: Travellers launch legal challenge against UK hotel quarantine policy and call it an ‘unlawful deprivation of liberty’ COVID-19: ‘Freedom Day’ boosted night-time economy – but many remain reluctant to return to the officeHowever, pre-tax losses shrank to $576.4m (£415m) from $1.64bn (£1.2bn) in the same period last year – aided by lease modifications and the vaccine-led reopening towards the end of the six-month window.
Cineworld boss Mooky Greidinger told investors: “While our results still carry the effect of COVID and related lack of product, we are encouraged by the upcoming line-up of big releases, especially for the upcoming four months.
“This will include four new Marvel movies as well as Top Gun Maverick, the new Bond, Matrix, Dune and many more.”
He also told the Reuters news agency that ticket sales were currently running at over 50% of pre-crisis levels.
Shares were up more than 7% in response.
However, AJ Bell financial analyst Danni Hewson pointed to the threat of a risk to audiences ahead from a closely-watched court case in the United States.
She wrote: “Cineworld may have its eyes fixed on Los Angeles Superior Court where Scarlett Johansson is suing Disney over the release of Marvel film Black Widow.
“She argues they went back on an agreement for the film to have an exclusive cinematic release rather than launching it on their Disney+ platform at the same time.
“She is taking this action for self-interested reasons as her salary is linked to box office receipts, which dropped dramatically after the opening weekend as many people opted to watch at home.
“However, cinemas too will be nervous if the major studios – many of which like Disney now have their own streaming platforms – decide to pursue this policy as a matter of course as we emerge from the pandemic.”
