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Cineworld pins hope on more blockbusters in 2022 as debt pile grows

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By Reuters
Cineworld pins hope on more blockbusters in 2022 as debt pile grows
Cineworld pins hope on more blockbusters in 2022 as debt pile grows   -   Copyright  Thomson Reuters 2022

By Yadarisa Shabong and Pushkala Aripaka

– Cineworld expressed confidence on Thursday that a meatier slate of movies in 2022 would help the British cinema chain bounce back from a two-year lull, although its mounting debt pile remained a challenge.

The world’s second largest cinema chain with over 9,000 screens globally, Cineworld said its 2021 losses narrowed to $708 million from about $3 billion in 2020, thanks partly to Marvel superhero blockbuster “Spider-Man: No Way Home”.

This year it is pinning hopes on sequels such as James Cameron’s “Avatar 2″ and Tom Cruise in “Top Gun: Maverick” as well as several Marvel films.

But any movie delays and further COVID-19 restrictions that could hit ticket sales pose a risk to its ability to repay credits due in June and early 2023, Cineworld said.

Its net debt stood at $8.9 billion at end-December, up some $600 million from 2020. Refinitiv data showed its credit score had sunk to 1, the lowest on a scale of up to 100, meaning it was highly likely to default in the next year.

Cineworld’s setbacks include a potential multi-million-dollar fine in a dispute with Canada’s Cineplex and delayed payments to disgruntled former shareholders of its U.S. chain Regal.

Cineworld has warned that it would not have enough liquidity to pay the C$1.23 billion ($971 million) sought by Cineplex as damages if its court appeal is unsuccessful.

It is now looking for new sources of liquidity after raising over $425 million last year, it said on Thursday.

Cineworld, which operates in 10 countries including the United States and the United Kingdom, admitted 95 million movie-goers in 2021, up 75% over 2020, but well below the 275 million seen pre-pandemic.

($1 = 1.2669 Canadian dollars)