Cineworld could be out of money ‘in weeks’
Cineworld could run out of money within weeks, analysts at the Bank of America have warned, with the chain needing to find $500m (£380m) if it is to survive the winter.
Last week the chain announced that it would temporarily close all of its screens in the UK and US due to the coronavirus pandemic, putting 45,000 jobs at risk.
The decision was taken after studios elected to delay the release of blockbusters like the new James Bond film due to fears that the disease would keep cinemagoers away.
In the note, which was reported by the Telegraph, analysts said that Cineworld was on course to get through about $420m in the second half of the year – more than the $400m it had in the bank in June.
“This suggests the group could run out of cash in November or December,” they added, sending shares down 5.7 per cent.
On top of that, commercial landlord AEW is suing the company for around £200,000 in unpaid rent.
Cineworld is one of a number of companies being pursued for rent by the firm, which has been accused of seeking to profit from the crisis, the Evening Standard reported.
A spokesperson for AEW said: “We are committed to adopting government recommendations and code of practice when managing relationships with all our tenants.
“We also have a duty to our clients who have entrusted their pensions and savings with us.”
Cineworld is yet to earmark a reopening date for its venues next year, and said it is now assessing various sources of additional liquidity, including raising cash from shareholders to try and stay afloat.
If it manages to do so, Bank of America said that it would need $500m to get through the first half of next year.
Research analyst Kiranjot Grewal said that this could be closer to $700m if Cineworld did not manage to agree an extension to its overdraft.
Cineworld declined to comment.