Cineworld is considering a Wall Street listing for all or part of its business in an effort to bolster its finances, which are under heavy pressure from the COVID-19 pandemic.
A US listing would give heavily indebted Cineworld, which gets the bulk of its revenue from its Regal cinemas in the United States, access to the largest capital market in the world, where rival US cinema group AMC this year became one of the so-called "meme stocks", sending its shares skyrocketing.
"We believe this is quite an interesting consideration which could be supportive of valuation if we were to see similar support in Regal as was with AMC," BofA analysts wrote.
The company, which had net debt of $8.44 billion as of the end of June, said that cash burn was $271 million in the first six months of the year, while losses narrowed to $576.4 million from $1.64 billion last year thanks to tighter cost control.
Rival AMC, which is the world's biggest cinema theatre group, has also reported a big quarterly loss, saying that ticket sales are running at less than one-third of 2019 levels.
New Releases
People have flocked back to cinemas in the past few months to watch movies such as Marvel's Black Widow and Paramount thriller A Quiet Place 2. Cineworld boss Mooky Greidinger expressed confidence in a line-up of big releases ahead, including four new Marvel movies. Tom Cruise's Top Gun Maverick, the new James Bond movie, The Matrix 4 and science fiction film Dune.
All of Cineworld's 787 sites were open as of June, with Greidinger saying that ticket sales are now at more than 50% of pre-crisis levels, as the United States and the UK eased months of pandemic curbs after vaccination drives picked up pace.
But concerns over new variants of COVID-19 and an accelerated shift by studios to release movies simultaneously on streaming platforms are still a cause for concern.
Cineworld said that it is expecting the window for movie releases in theatres to stabilise to somewhere between 20 and 60 days by next year.
"One of the most significant things that we all learned from the short window is that it creates an opportunity for high-quality pirated copies which is going all over the world," Greidinger said.
Additional Loans
Cineworld has said that it has secured $200 million in additional loans from existing lenders, as it prepares to welcome back more movie-goers for a strong slate of upcoming films.
The company, which had net debt of $8.3 billion at the end of 2020, also renegotiated existing debt agreements to reduce minimum liquidity requirements and relax limitations on the use of cash as more cinemas reopen.
"The additional liquidity announced today provides the group with significant operating flexibility now that cinemas have opened across the world," Mooky Greidinger said.
Cineworld, which sunk to its first-ever loss in March as the pandemic shut theatres and delayed movie releases, said that business has improved since halls started reopening in April and it is well-positioned to benefit from pent-up customer demand.
The owner of Regal Cinemas said that it is monitoring the potential impact of new COVID-19 variants, but is confident about its prospects due to an "unprecedented slate of films" including those mentioned above.
News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.
