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UPDATE 4-Cineworld brings down curtain on U.S., UK theatres; 45,000 jobs hit

Mon, 5th Oct 2020 07:23

* Cineworld temporarily shuts all U.S., UK theatres

* Blames halt in new releases after further James Bond delay

* 45,000 jobs to be affected

* All additional liquidity options being considered

* Shares plunge as much as 60% to a record low
(Adds S&P comments on AMC, chart, updates share move)

By Muvija M and Yadarisa Shabong

Oct 5 (Reuters) - Cineworld, the world's
second-biggest cinema chain, will close its UK and U.S. movie
theatres this week, leaving as many as 45,000 workers
unemployed, as it fights a coronavirus-related collapse in film
releases and cinema-going.

The company said the reluctance of studios to go ahead with
major releases such as the new James Bond film had left it no
choice but to close all 536 Regal theatres in the U.S. and its
127 Cineworld and Picturehouse theatres in the UK from Oct. 8.

Cineworld Chief Executive Mooky Greidinger told Sky News
that the operations might resume in "two months, or a bit
longer". Movies including the superhero sequel "Wonder Woman
1984" are slated for a Christmas Day release.

"From a liquidity point of view, we were bleeding much
bigger amounts when we are open than when we were closed,"
Greidinger said.

Cineworld's statement on Monday, confirming leaks over the
weekend, spelt out the scale of job losses from its move, which
affects thousands of ancillary staff including cleaners and
security as well as its own employees.

Shares fell as much as 60% to an all-time low within ten
minutes of the opening bell on Monday as the group, which is
carrying heavy debt due in part to its acquisition of Regal in
2018, said it was looking at all ways of raising additional
funds.

By 0915 GMT, they were 30% lower, taking their loss this
year to more than 90%.

Cineworld's statement follows a grim evaluation by ratings
agency S&P on Friday of rival AMC Entertainment, owner
of the Odeon chain, which said the U.S.-based group may run out
of liquidity in six months unless it can raise more capital.

The entertainment industry has been among the heaviest hit
by social distancing and other restrictions, with Walt Disney
last week announcing plans to lay off roughly 28,000
employees, mostly at its U.S. theme parks.

Cineworld began reopening in July after virus-related
restrictions started to ease, but the further postponement of
the James Bond film "No Time To Die" and others including
Marvel's "Black Widow" have left the months ahead looking bleak.

"Without these new releases, Cineworld cannot provide
customers in both the U.S. and the UK... with the breadth of
strong commercial films necessary for them to consider coming
back to theatres," it said.

While some cinemas in China, the world's second largest
movie market, have reopened with strong audiences, there is a
lack of major movies to watch on the big screen.

Studios have chosen to release some of this year's major
planned blockbusters on Netflix or the Disney Plus streaming
platform, and have cancelled others until 2021.

The boss of rival chain Vue cinemas Tim Richards told BBC
Radio: "Our problem right now is we have no movies, and this was
a big blow for us."

"We are likely going to make it through. I'm concerned about
the independents and the small regional operators right now that
are going to really struggle, and when they close, they may not
reopen."

Britain has slid into a fresh round of lockdowns and
tightened social restrictions in the past month.

"Although the delay of the latest 007 blockbuster prompted
the decision, Bond isn't the villain in this piece," Hargreaves
Lansdown analyst Susannah Streeter said.

"The spread of COVID-19 around the world has been a horror
movie for the industry and the fresh wave of infections is the
latest installment in what's been a devastating story for cinema
chains."

(Reporting by Muvija M and Yadarisa Shabong in Bengaluru, Sarah
Young and Kate Holton in London; Editing by Krishna Chandra
Eluri, Patrick Graham and Jan Harvey)

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