Hit hard by the global health crisis and the subsequent capacity restrictions as well as the closure of cultural venues, including cinemas, Kinepolis Group has secured a three-year €80m bank loan.
Although Kinepolis cinemas in Luxembourg are set to reopen on 13 January, following the government’s announcement last week that the cultural sector would be able to receive visitors again, the same is not true for the group’s cinemas in other countries where more severe restrictions are still in place.
Kinepolis says that it still has sufficient financial means to overcome a closing period of more than 10 months for all its cinemas, but the uncertainty and constant changes in lockdown measures depending on countries and regions have led the Belgian cinema chain to take €80m in credit over three years in order to prepare for a worst-case scenario due to the recent developments of the covid-19 pandemic.
“The 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,” said Kinepolis Group CEO Eddy Duquenne.
As announced in a statement by Kinepolis on Monday, the banks in question have also extended the suspension of the credit covenants ('covenant holiday') until 30 June 2022. Kinepolis explained that it was able to secure financing through bond issues and, to a more limited extent, by means of bank debt.
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.
Kinepolis Group currently employees around 4,600 staff across 111 cinemas worldwide, including 56 in Europe as well as 45 in Canada and another 10 in the US.
