(qlmbusinessnews.com via uk.reuters.com — Mon, 9th Mar 2020) London, UK —
(Reuters) – Cineworld said on Monday its biggest shareholder would sell almost a third of its stake in the British cinema operator to refinance a margin loan, after shares in the company sank to a 7-year low on bets audiences would collapse in the coronavirus crisis.
Shares in the company (CINE.L) sank by a fifth in value in early trading, following news of the sale by Global City Theatres (GCT) of a 7.9% stake for about 116 million pounds to buyers including Singapore sovereign wealth fund GIC.
Cineworld, whose shares have sunk 50% this year amid a surge in bets by stock market short sellers against it, said the proceeds of the sale would be used to restructure GCT’s existing margin loan facility with Barclays and HSBC into a new secured corporate loan.
The new secured facility had no margining provisions or connection to the price of the company’s shares, it said.
Shares in both GCT and its parent company Global City Holdings B.V. are held in trusts for the children of Cineworld Chief Executive Officer Moshe Greidinger and deputy CEO Israel Greidinger.
Cineworld stressed that both men remained committed to Cineworld as members of its management team. After the sale GCT will still hold 275 million shares, or 20% of the company.
According to Reuters calculations based on the details given by the company, GCT sold its stake at around 107.4 pence per share, already a discount to Friday’s close, after the company’s stock was hammered by news that the latest James Bond premiere would be delayed by seven months.
By 0814 GMT on Monday, shares were trading down 23% from the previous close at 87 pence.
An affiliate of GIC bought 62 million of the 108 million shares sold in the deal, representing around 4.5% of Cineworld’s share capital, the company said.
Reporting by Tanishaa Nadkar
