Cineplex looks to lure audiences back after collapse of Cineworld deal

Cineplex looks to lure audiences back after collapse of Cineworld deal

TORONTO — Cineplex is hoping moviegoers are willing to return to its theatres as the company deals with an uncertain future in the wake of its failed plan to sell itself to Cineworld.

“At this point we’re looking to stabilize the company and get everything in the right place,” chief executive Ellis Jacob told The Canadian Press on Tuesday.

Cineplex shares were down more than 17 per cent to $8.23 on the Toronto Stock Exchange after the company warned about its ability to “continue as a going concern” in its release of delayed quarterly results.

Cineplex reached a deal with its lenders to provide some financial relief due to the COVID-19 pandemic which forced the company to close its theatres in March.

The agreement can be extended to the second and third quarters of 2020, but to do that the company needs to secure a minimum of $250 million in new financing.

In financial documents released Monday evening, Cineplex warned that the uncertainties it has faced “lend significant doubt about the company’s ability to continue as a going concern.”

“While Cineplex currently has sufficient liquidity to satisfy its immediate financial obligations, there can be no assurance that the steps that management is taking will provide sufficient liquidity in the near term to meet its ongoing obligations, nor can it be assured that it will be able to obtain additional financing at favorable terms, or at all,” the company said.

The warning came as Cineplex is set to reopen some theatres in British Columbia, Saskatchewan, Quebec, New Brunswick, Nova Scotia and Newfoundland on Friday.

The company welcomed back customers to its Rec Room gaming and food complexes in Winnipeg, Calgary and Edmonton during the week of June 15 and reopened six theatres in Alberta on June 26.

“We’re optimistic, but it’s baby steps because we have to be careful,” Jacob said.

Moviegoers heading back to theatres are in for an experience unlike the one they left in March. To keep guests distanced, reserved seats will be rolled out in every auditorium, which will get additional cleanings.

Some moviegoers will be clad in masks. Cineplex won’t make them mandatory, but will hand them out and encourage their use.

Concession stands — once a big money-maker for Cineplex — will be pared back to popcorn and a few other favourites, with some of the items that require more intense cooking taking a temporary hiatus.

The changes come amid the aftermath of Cineworld PLC’s abortive $2.8-billion takeover deal to buy Cineplex. Cineworld claims it walked away from the deal after Cineplex breached the contract, while Cineplex has vowed to sue.

Jacob has not ruled out another deal to sell Cineplex. “One has to look at all the options that come forward,” he said.

Cineplex lost $178.4 million or $2.82 per diluted share for the three months ended March 31, compared with a loss of 12 cents per share or $7.36 million a year earlier.

Revenue tumbled to $282.8 million from $364.6 million, while attendance plunged to 10.7 million from nearly 15 million.

Cineplex also scrapped its dividend and warned it wouldn’t expect one to return in the near future.

Jacob says he has heard that moviegoers are tired of watching films at home and want new releases, but he’s tied to screening what distributors and studios will allow, so he’s focused most on rebuilding consumer confidence and convincing people that it’s safe to head to the theatre again.

“I’d rather see an auditorium full of people than people watching at home,” Jacob said.

“We need to get the guests comfortable and we need to bring them back to our environment and then we will look at the opportunities as we move forward. We have to put this COVID fear behind us.”

This report by The Canadian Press was first published June 30, 2020.

Companies in this story: (TSX:CGX)

Tara Deschamps, The Canadian Press

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Alberta has 3,651 active cases of COVID-19. (File photo)
432 new COVID cases sets another record Friday

Central zone holds steady at 126 active cases

The future site of the Rimbey Travel Centre. Web photo
New Rimbey development aims to capitalize on highway traffic

Phase I of the Rimbey Travel Centre would be along Hwy. 20, if approved

"We are looking seriously at the spread and determining what our next steps should be," says Alberta’s chief medical officer of health, Dr. Deena Hinshaw, as the daily number of COVID-19 cases continues to climb.
427 new COVID cases is highest in Alberta ever

Central zone has 126 active cases of COVID-19

soup
Rimbey FCSS to introduce the Cultural Community Kitchen

The Cultural Community Kitchen sessions will be held at the Rimbey Co-op

robbery
UPDATE: Shooting suspect arrested by Wetaskiwin/Camrose RCMP

Rimbey RCMP had responded to a complaint of an armed robbery at the Bluffton City General Store

B.C. Liberal leader Andrew Wilkinson, B.C. NDP leader John Horgan and B.C. Greens leader Sonia Furstenau. (Black Press Media)
VIDEO: One day until B.C. voters go to the polls in snap election defined by pandemic

NDP Leader John Horgan’s decision to call an election comes more than a year ahead of schedule and during a pandemic

This photo provided by Air Force Reserve shows a sky view of Hurricane Epsilon taken by Air Force Reserve hurricane hunter team over the Atlantic Ocean taken Wednesday, Oct. 21, 2020.   Epsilon’s maximum sustained winds have dropped slightly as it prepares to sideswipe Bermuda on a path over the Atlantic Ocean.  The National Hurricane Center says it should come close enough Thursday, Oct. 22, evening to merit a tropical storm warning for the island.  (Air Force Reserve via AP)
Hurricane Epsilon expected to remain offshore but will push waves at Atlantic Canada

Epsilon is not expected to have any real impact on land

A voter places her absentee ballot in the ballot box, Wednesday, Oct. 7, 2020, at Merrill Auditorium in Portland, Maine. THE CANADIAN PRESS/AP/Robert F. Bukaty
American voters living in Canada increasingly being counted in presidential race

The largest number of Canadian-based American voters cast their ballots in New York and California

A composite image of three photographs shows BC NDP Leader John Horgan, left, in Coquitlam, B.C., on Sept. 25, 2020; BC Green Party Leader Sonia Furstenau, centre, in Victoria on Sept. 24, 2020; and BC Liberal Party Leader Andrew Wilkinson Pitt Meadows, B.C., on Sept. 24, 2020. THE CANADIAN PRESS/Darryl Dyck, Chad Hipolito
British Columbia votes in snap election called during COVID-19 pandemic

NDP Leader John Horgan called the snap election one year before the fixed voting date

Nunavut's provincial flag flies on a flag pole in Ottawa, on Tuesday June 30, 2020. The annual report from Nunavut's representative for children and youth says "complacency and a lack of accountability" in the territory's public service means basic information about young people needing services isn’t tracked. THE CANADIAN PRESS/Adrian Wyld
Nunavut’s young people ‘should be expecting more’ from government services: advocate

‘The majority of information we requested is not tracked or was not provided by departments’

Ryen Williams, 11, with a lost miniature horse at JJ Collett Oct. 23. Photo by Don Williams
UPDATE: Owners found

Father and son found him while out for a walk at JJ Collett

A Le Chateau retail store is shown in Montreal on Wednesday July 13, 2016. Le Chateau Inc. says it is seeking court protection from creditors under the Companies’ Creditors Arrangement Act to allow it to liquidate its assets and wind down its operations.THE CANADIAN PRESS/Ryan Remiorz
Clothing retailer Le Chateau plans to close its doors, files for CCAA protection

Le Chateau said it intends to remain fully operational as it liquidates its 123 stores

U.S. border officers at the Peace Arch crossing arrested two men on California warrants this week. (File photo)
Ottawa predicts system delays, backlogs unless court extends life of refugee pact

Canada and the United States recognize each other as safe places to seek protection

Conservative member of Parliament Michelle Rempel Garner, left to right, Conservative Leader Erin O’Toole and Conservative Deputy Leader Candice Bergen arrive to hold a press conference in Ottawa on Thursday, Oct. 22, 2020. THE CANADIAN PRESS/Sean Kilpatrick
No-confidence showdown over sweeping Tory motion on government handling of pandemic

The Conservative motion is to be put to a vote Monday and has the support of both the Bloc Québécois and NDP

Most Read