The Financial Post reports in its Thursday, July 2, edition that Cineplex has taken a $173-million charge. A Bloomberg dispatch to the Post reports that Cineplex on Monday posted a loss of $178-million for the quarter ended March 31. The loss included a writedown on property and other assets and the company acknowledged that the business will take a long time to recover from COVID-19. Cineplex also announced it had struck an agreement with lenders to relax financial covenants as it deals with an uncertain future after a failed takeover.
Cineplex said lenders will require it to raise $250-million by the end of August. Some of the new money must be used to repay existing debt.
The company shut all of its venues on March 16 and most remain closed, though it plans to open some outlets in six provinces starting on Friday. Chief executive officer Ellis Jacob remains optimistic about the firm's business model. He says: "We had hiccups in the past and we worked together to make sure we come out much stronger and better as an organization. The only risk is at the end of the day we don't know how long this pandemic will last." Cineworld Group agreed last year to take over Cineplex but scrapped the deal on June 12.
© 2020 Canjex Publishing Ltd. All rights reserved.