Cineplex Inc. (TSX: CGX) announced on Thursday the fourth amendment to its credit agreement with its lenders. This provides for the continuance of the delay in financial covenant testing until Q2 2022.
According to the amendment, the suspension is expected to remain in place until certain conditions are met, including a minimum monthly liquidity threshold.
The movie theater chain reported in November 2021 its third-quarter financials showing $28.5 million in cash and cash equivalents. The firm also ended the quarter with a current assets balance of $114.7 million and a current liabilities balance of $465.2 million.
CEO Ellis Jacob said that the move is brought about by the emerging Omicron variant of SARS-CoV-2, the virus that causes COVID-19. The firm felt “it was prudent to approach [its] supportive lenders” for the continued suspension.
“The timing of these restrictions was unfortunate as we were approaching our busiest period of the year,” said Jacob. “While we were not able to realize the full benefits of the film Spider-Man: No Way Home… we know the industry is recovering and our guests want to be back in our theatres.”
The company recently won its breach of contract case filed against Cineworld, with the court awarding Cineplex $1.24 billion in damages.
Cineplex Inc. last traded at $13.49 on the TSX.
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