While independent cinemas in Vancouver announced their temporary closure today in response to COVID-19, Cineplex also announced that it will close its venues during the pandemic.
From today (March 16) to April 2, Cineplex is shutting down its chain of theatres and entertainment venues, such as the Rec Room and Playdium, across Canada. The company is the largest movie exhibitor in the country.
The reopening of the venues will be reassessed on April 2.
Cineplex is facing additional issues as its $2.8-billion deal to be acquired by U.K.–based Cineworld is underway. The takeover agreement was announced on December 16, 2019.
One of the conditions of the agreement is for Cineplex to maintain a debt below $725 million, but the pandemic is creating financially challenges for the company.
“The impact of the COVID-19 outbreak in Canada and the rapidly evolving reaction of governments and the public to the outbreak have made business planning uncertain for the exhibition and location-based entertainment industries,” Cineplex stated in a news release. “In response to declining attendance and certain government directed shutdowns of places of public gatherings including theatres, Cineplex is managing its business to reduce expenses in an amount necessary to offset declining revenues so that Cineplex is supporting its business and would be in a position to satisfy the Debt Condition.”
The statement also notes that revenue decline from prolonged closures could affect Cineplex’s ability to satisfy the conditions of the deal.
Cineplex is endeavouring to meet all conditions of the deal by June 30.