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Cineworld raises more cash as Covid closures force $3bn annual loss

Cineworld has secured extra funding as it revealed a huge annual loss due to closures during the Covid-19 pandemic and warned any tightening of restrictions would force it to seek further cash.
The company on Thursday reported a pre-tax loss of £3bn, compared with a profit of $212m a year earlier as revenue collapsed to $852m from $4.3bn in 2019. Cineworld earlier this week said it planned to re-open US cinemas on April 2.

It also announced a binding commitment from a group of institutional investors for a new $213m convertible bond due in 2025 and said it would ask for shareholder approval to temporarily suspend the company’s borrowing limit.

“There can be no certainty as to the future impact of Covid-19 on the group. Governments strengthening of restrictions on social gathering may lead to closure of cinemas or studios delaying movie releases. This would have a negative impact on the Group’s financial performance and likely require the need to raise additional liquidity,” Cineworld said.

It added that it expected strong pent-up demand for affordable out-of-home entertainment post re-opening due to the pandemic “as indicated by the theatrical industry performing well in re-opened markets such as China, Japan and Australia”.

The company closed its UK and US cinemas in October as studios delayed major box office releases. Analysts have expressed concerns about the pace of recovery in the industry with more people turning to streaming services for their entertainment while stuck at home during lockdowns.

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