By Tanishaa Nadkar
(Reuters) - Cineworld's
The world's second-largest cinema operator said its executive directors agreed to defer their salaries and bonuses and reiterated it was in talks with lenders over its ongoing capital requirements.
Shares in the company, which have plunged 78% this year, were up 36% at 53.9 pence by 1250 GMT, making it the biggest gainer on the midcap index <.FTMC>.
Some analysts again said the company should abandon its $1.65 billion takeover of Canadian rival Cineplex
But the company, which said it continued to monitor progress of the deal, told Reuters it had not changed its attitude since last month when finance chief Nisan Cohen said they "love the deal".
Cineworld also said last month it could fail to meet its debt commitments in a worst-case coronavirus scenario where its cinemas were shut for up to three months.
"Without Cineplex, and with aggressive action on the fixed cost base, we believe that this period could be materially extended," Peel Hunt analysts said, referring to how long it could cope with its cinemas closed.
Its debt stands at $3.5 billion, excluding leases and the additional financing of Cineplex. The company said its non-executive directors will also defer their fees and that it was also curtailing all unnecessary spending.
It has suspended dividend payment for the fourth-quarter and upcoming quarters in 2020.
"Combined with the company's heavy borrowings, built up to fund big acquisitions, this made the decision to defer the payout an inevitability...Coming out the other side will not be easy," AJ Bell analyst Russ Mould said.
Cineworld's combined credit score, which measures how likely a company is to default in the next year on a scale of 100 (very unlikely) to 1 (highly likely), was "1", Refinitiv Eikon data showed.
The United States, where the company operates 500 cinemas and generates three quarters of its revenue, has by far seen the most confirmed virus cases at more than 355,000.
"We welcome the emergency support programmes to protect jobs and business that have been announced in our markets and will access them as appropriate," Cineworld said.
(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Vinay Dwivedi and Keith Weir)