Cineworld to hold crunch vote to increase its £6bn debt pile as it prepares to reopen cinemas
- Cineworld shareholders to vote on plan to take on an extra £155m of debt
- It is seeking approval for the suspension of its borrowing limits
- It said the money is for ‘further liquidity’ reasons in case of more disruption
Embattled cinema operator Cineworld will tomorrow hold a crunch vote to increase its £6billion debt pile by an extra £155million as it prepares to get film buffs back in its venues.
The company, which has operations across the UK and the US, has had a rough time since the pandemic started last year.
It is holding a general meeting for shareholders to seek approval for the suspension of its borrowing limits and to allow it to issue a convertible bond to raise the cash.
Crunch vote: Cineworld said it needs the money for ‘further liquidity’ reasons if there is more disruption caused by Covid
Cineworld, one of the most shorted stocks listed on the London Stock Exchange, said it needs the money for ‘further liquidity’ reasons if there is more disruption caused by Covid.
Lockdowns in Britain and the United States have forced the company to temporarily shut its 767 sites. The firm has been forced to furlough or lay off its 45,000 staff and it has announced its first annual pre-tax loss of £2.2billion.
However, the company’s shares have rallied hard in the last six months amid hopes that it will soon be able to reopen its cinemas across the world in the next few weeks.
In addition, a secretive Chinese tycoon is understood to have been busy building up a significant shareholding in Cineworld in recent weeks.
Liu Zaiwang, a construction tycoon who is said to be worth about £600million, has built up a 13.8 per cent stake in the firm through his Jangho Group vehicle.
This has prompted speculation that Zaiwang may be interested in acquiring the group.