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11:29 · 17 August 2022

Cineworld plummets over 50% to a record low

Cineworld (CINE.UK) shares are down 50% today after a UK movie theater operator warned that lackluster trading is prompting potential financing decisions that could significantly dilute shareholders.

  • Company noticed that despite a gradual recovery of demand since reopening in April 2021, recent cinema admission levels have been below expectations due to limited film slates.

  • “These lower levels of admissions are due to a limited film slate that is anticipated to continue until November 2022 and are expected to negatively impact trading and the Group’s liquidity position in the near term.”

  • The cinema chain it's "evaluating various strategic options to both obtain additional liquidity and potentially restructure its balance sheet through a comprehensive deleveraging transaction."

  • "Any deleveraging transaction will likely result in very significant dilution of existing equity interests in Cineworld," it added. 

  • The company's financial situation is rather gloomy as it may have to pay $970 million in damages to Cineplex for terminating an agreed takeover deal as the beginning  of the pandemic. Cineworld appealed against the court's decision. At the end of December, its net debt stood at a startling $4.84 billion, with cash and restricted cash of $354.3 million.

Cineworld (CINE.UK) dropped over 60% in 2022 so far and reached all-time low at £0.0980 during today's session. Source: xStation5

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