Further to the announcement made by Cineworld on 15 May 2019, Cineworld Group plc (LON:CINE) today announced the signing and completion of an additional sale and leaseback transaction relating to 18 US-based multi-screen cinemas totalling 255 screens (the “Sale and Leaseback”, or the “Transaction”). The Transaction is consistent with Cineworld’s existing business model of operating a predominantly leasehold estate and long-term strategy of crystallising value for its shareholders.
The Transaction involves Cineworld selling the cinemas to a subsidiary of EPR Properties (“EPR”) for cash consideration of US$ 270.0 million and leasing them back under 15-year leases on customary terms. The cinemas had a book value of US$ 230 million at the end of 2018 including an uplift on revaluation as part of the acquisition of Regal and generated EBITDA of US$ 42.5 million in 2018.
As outlined in the announcement made by Cineworld on 15 May 2019, the Board has considered the appropriate use of combined proceeds from both this Transaction with EPR and the sale and leaseback of 17 US-based cinemas referred to in that announcement. Of the combined cash consideration of US$ 556.3 million, the Board utilised half of the proceeds to reduce gross debt and will return the second half to shareholders by way of a special dividend.
As such, the Board of Cineworld announces that it will pay a special dividend of US 20.27 cents per ordinary share, with an aggregate value of US$ 278.1 million. The timetable for this special dividend is as follows:
| Announcement | 13 June 2019 |
| Ex-Dividend Date | 20 June 2019 |
| Record Date | 21 June 2019 |
| Final Date for Currency Election | 21 June 2019 |
| Special Dividend Exchange Rate Determined | 21 June 2019 |
| Payment Date | 5 July 2019 |
Following the completion of the Transaction and the sale and leaseback completed in May 2019, Cineworld remains comfortably on track to deliver reduced leverage in line with expectations.
Anthony Bloom, Chairman of Cineworld Group plc, said:
“We are pleased to confirm today the use of proceeds from our two recent sale and leaseback transactions – highlighting our commitment to deleveraging and our strategy of generating strong total returns for our shareholders.”
Mooky Greidinger, Chief Executive Officer of Cineworld Group plc, said:
“I am very pleased to announce this further sale and leaseback transaction today. We have now realised the value of 35 properties acquired as part of the Regal transaction and further optimised our business in line with our leasehold operating model. We are delighted to have completed this transaction with EPR, a business we already worked closely with prior to the transaction as a significant landlord of properties in the Regal estate.
As recently highlighted, we have been spending a lot a time in the United States since the acquisition of Regal and remain very excited about the progress we made to date and the outlook going forward. In particular, the integration of Regal is on plan and we are on track to deliver on our synergy plans for 2019.”
