Cineworld shares spike on cinema reopening and debt amendments

Cineworld shares (LON:CINE) jumped on Thursday as the cinema group announced favourable amendments to their debt covenants and said all their cinemas would reopen in July.

Cinworld shares had rose 24% by Thursday lunch time, with shares reaching the highest levels since March.

The cinema group said a release to the market:

“The Group has also agreed the terms of $110m of additional liquidity through an increase in its revolving credit facility. In addition, the Company has secured credit committee approval to apply for an additional $45m through the CLBILS loan scheme in the UK and expects shortly to commence a process to access $25m through the US government CARES Act. Cineworld expects that this additional liquidity, to the extent required, will provide it with sufficient headroom to support the Group even in the unlikely event cinemas remain closed until the end of the year.”

The market has flocked back into travel and leisure shares this week as the reopening of economies a relaxation of social distancing measures means companies in the sector will soon again be able to take paying customers.

Cineworld operates 787 cinemas across 10 countries, all of which were shut in early April.