Cineplex looks to lure audiences back after collapse of Cineworld deal

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

Just Posted

Photo Courtesy: Echo Lacombe Association logo.
Lacombe City Council supports Echo Lacombe with location for pilot program

Echo Lacombe Association will run a pilot propgram on food rescue until November, 1, 2021

The Government of Alberta identified 115 new COVID-19 cases Sunday, bringing the provincial total to 3,089.
(Black Press file photo)
Red Deer COVID cases continue to fall

114 cases in Red Deer, down one from Saturday

File Photo
Blackfalds RCMP seeking suspects in traffic collision

RCMP are asking the public for help identifing two suspects wanted for multiple offences

Maskwacis Pride crosswalk (Left to right): Montana First Nation Councillor Reggie Rabbit, Samson Cree Nation Councillor Louise Omeasoo, Samson Cree Nation Councillor Katherine Swampy, Samson Cree Nation Councillor Shannon Buffalo, Samson Cree Nation Chief Vern Saddleback.
Pride in Maskwacis

The 4th inaugural Maskwacis Pride crosswalk painting took place on Saturday June 12th, 2021

Alberta Premier Jason Kenney arrives at the 2021 budget in Edmonton on Thursday, Feb. 25, 2021.THE CANADIAN PRESS/Jason Franson
Alberta launches COVID vaccine lottery with million-dollar prizes to encourage uptake

The premier says the lottery will offer three prizes worth $1 million a piece, as well as other prizes

People watch a car burn during a riot following game 7 of the NHL Stanley Cup final in downtown Vancouver, B.C., in this June 15, 2011 photo. THE CANADIAN PRESS/Geoff Howe
10 years ago: Where were you during the 2011 Vancouver Stanley Cup Riots?

Smashed-in storefronts, looting, garbage can fires and overturned cars some of the damage remembered today

A health-care worker holds up a sign signalling she needs more COVID-19 vaccines at the ‘hockey hub’ mass vaccination facility at the CAA Centre during the COVID-19 pandemic in Brampton, Ont., on Friday, June 4, 2021. This NHL-sized hockey rink is one of CanadaÕs largest vaccination centres. THE CANADIAN PRESS/Nathan Denette
‘Vaxxed to the max’: Feds launch Ask an Expert campaign to encourage COVID shots

Survey shows that confidence in vaccines has risen this spring

Children’s shoes and flowers are shown after being placed outside the Ontario legislature in Toronto on Monday, May 31, 2021. THE CANADIAN PRESS/Frank Gunn
Ontario commits $10 million to investigate burial sites at residential schools

Truth and Reconciliation Commission identified 12 locations of unmarked burial sites in Ontario

Two hundred and fifteen lights are placed on the lawn outside the Residential School in Kamloops, B.C., Saturday, June, 13, 2021. The remains of 215 children were discovered buried near the former Kamloops Indian Residential School earlier this month. THE CANADIAN PRESS/Jonathan Hayward
Days after Kamloops remains discovery, Tk’emlups families gather to unite, move ahead

‘We have to work together because this is going to be setting a precedent for the rest of the country’

In this Saturday, May 29, 2021, file photo, people crowd the Santa Monica Pier in Santa Monica, Calif. California, the first state in America to put in place a coronavirus lockdown, is now turning a page on the pandemic. Most of California’s coronavirus restrictions will disappear Tuesday, June 15, 2021. (AP Photo/Damian Dovarganes, File)
With COVID tamed, it’s a ‘grand reopening’ in California

No more state rules on social distancing, no more limits on capacity, no more mandatory masks

Montreal Canadiens goaltender Carey Price (31) is scored on by Vegas Golden Knights defenseman Alec Martinez, not pictured, during the second period in Game 1 of an NHL hockey Stanley Cup semifinal playoff series Monday, June 14, 2021, in Las Vegas. (AP Photo/John Locher)
Habs fall 4-1 to Vegas Golden Knights in Game 1 of NHL semifinal series

Match was Montreal’s first game outside of Canada in 2021

The Kamloops Indian Residential School is photographed using a drone in Kamloops, B.C., Monday, June, 14, 2021. The remains of 215 children were discovered buried near the former school earlier this month. THE CANADIAN PRESS/Jonathan Hayward
Communities grapple with what to do with former residential and day schools

Some tear them down as a tool to help healing, others repurpose them as tools for moving forward

RCMP Const. Shelby Patton is shown in this undated handout photo. RCMP say that Patton was hit by an allegedly stolen truck that he had pulled over on Saturday morning in Wolseley, east of Regina. THE CANADIAN PRESS/HO, RCMP
Pair charged in Saskatchewan Mountie’s death make first court appearance

Const. Shelby Patton was hit by an allegedly stolen truck that he had pulled over Saturday morning

David and Collet Stephan leave for a break during an appeal hearing in Calgary on Thursday, March 9, 2017. THE CANADIAN PRESS/Todd Korol
Appeal Court rejects stay for Alberta couple facing third trial in son’s death

Pair accused in their earlier trials of not seeking medical attention for their son sooner

Most Read