Regulatory release, inside information
11 January 2021, 17h45
The cinema sector and Kinepolis are being hit particularly hard by the COVID-19 pandemic, resulting in cinema closures, capacity restrictions and the postponement of Hollywood blockbuster releases. As previously announced, Kinepolis went into this global crisis with a healthy balance sheet and significant cash reserves. In combination with the implemented cost-cutting measures and taking into account the new construction projects in progress, the Group still has, as planned, sufficient financial funds to bridge a period of more than 10 months of closure of all its cinemas (which is considered the worst case scenario).
Nevertheless, in order to be prepared for possible longer delays before the full resumption of its activities, in view of the recent evolution of the COVID-19 pandemic, Kinepolis has taken out an additional loan of EUR 80 million with its main bankers for a period of 3 years.
In this context, the banks also extended the suspension of the credit covenants ('covenant holiday') until 30 June 2022. Kinepolis secured financing through bond issues and, to a more limited extent, by means of bank debt. The covenants are linked solely to the bank credit facilities valued at EUR 220 million. These covenants - which include a maximum debt level - were replaced by a liquidity covenant following the extended suspension.
In line with the existing bank credit facilities, the additional credit provides for a number of conditions that limit the disposal of assets, acquisitions and the payment of dividends above a predetermined debt leverage of 3.75.
Because of the healthy balance sheet, the strong cost control measures, the solid real estate position and the back-up of an 80% guarantee provided by Gigarant, Kinepolis succeeded in concluding the additional credit at attractive commercial terms.
Eddy Duquenne, CEO Kinepolis Group: “We are piloting the Group through the COVID pandemic as planned and are on schedule with regards to cash planning, with sufficient financial reserves to allow the Group to bridge a full closure scenario for still more than 10 months. The additional credit places us in a reassuring position in terms of financial reserves as it enables us to prepare for scenarios where the end of the pandemic might take longer than anticipated. Until recently, no one had even considered the possibility of a third wave. Be that as it may, we remain confident that we will be able to resume our operations and build on our recovery in the coming months.”
Kinepolis Press Office
+32 (0)9 241 00 16
Kinepolis Group NV was formed in 1997 as a result of the merger of two family-run cinema groups and was listed on the stock exchange in 1998. Kinepolis offers an innovative cinema concept which serves as a pioneering model within the industry. In addition to its cinema business, the Group is also active in film distribution, event organization, screen publicity and property management.
In Europe, Kinepolis Group NV has 56 cinemas spread across Belgium, the Netherlands, France, Spain, Luxembourg, Switzerland and Poland. Since the acquisition of Canadian movie theatre group Landmark Cinemas and American movie theatre group MJR, Kinepolis also operates 45 cinemas in Canada and 10 in the US.
In total, Kinepolis Group currently operates 111 cinemas worldwide, with a total of 1,081 screens and almost 200,000 seats. Kinepolis employs 4,600 people, all committed to giving millions of visitors an unforgettable movie experience. More information on www.kinepolis.com/corporate.