Cinema chain Cineworld has warned revenue lost to coronavirus could leave it unable to pay off debt or even having to close cinemas permanently.
The world’s second-largest cinema chain said while it had yet to experience any material financial hit from the spread of the virus it could lose up to three months’ revenue in an extreme situation of widespread closures, and that the worst case scenario outcome of this would be permanent closures.
“There is a risk of breaching the group’s financial covenants, unless a waiver agreement is reached with the required majority of lenders within the going concern period,” Cineworld said.
The FTSE 250 firm is saddled with $3.5bn in debt, exclusing leases, as it begins to pay for its takeover of Canadian chain Cineplex.
The group’s share price tumbled more than 35% on Thursday.