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Cinemas Wider

05 October 2020 by jbchevrel

VUE international CDS widened to 27% upfront today, on the 5y contract. It was a member of XOver indices until the series s31 included, which is now 3.5y. We had bad news for the cinema sector this weekend. More precisely on Cineworld (world’s second-largest cinema chain). Indeed, Cineworld ($8.2B net debt / with its cinemas shut, burns $50-60m/month / Cash was $150m cash in August + undrawn $110m facility) will close all its UK and US cinemas indefinitely. Late last week, Hollywood studio MGM postponed (again) the release of ‘No Time to Die’, the latest James Bond movie (it was due on Nov 12, after being delayed once from last April). That was the latest setback, but regardless audience has been tiny, which was a big part of what motivated the group to close shop. Cineworld and Vue, which both operate in 10 countries, had already been forced to shut their movie theatres in spring after governments forced them. They both have used government support schemes to furlough employees. So the fact that the UK government chose to unwind its emergency furlough scheme left cinema chains with an unsustainable burden given that they had small income.