Wednesday, January 26

Ster-Kinekor reports ‘stable’ cinema conditions, but remains on business bailout

The Ster-Kinekor film group is confident that it is in a ‘stable’ condition, with current improved attendance levels and a continued push from the country’s ongoing vaccination rollout and reduction in Covid-19 cases.

The group entered a business rescue at the end of January 2021.

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Business rescue (BRP) practitioner Stefan Smyth says that given the positive discussions with key stakeholders to date, this upward trajectory is still expected towards the end of the financial year as it is “backed by a strong ‘roster’ of cinematographic content ”.

“Theater attendance has recovered to levels prior to the last Level 3 shutdown and exceeded these levels on specific opening weekends, such as [that of] James Bond ‘There is no time to die’, where attendance levels were almost double than anticipated, in the context of Covid, “said Smyth.

“This recovery represents a concession for a potential [fourth Covid-19 wave], but not as acutely as wave 3, given the progress to date and the ongoing vaccine launch. ”

Due to the financing of the business and now the continued generation of cash that has allowed continued trading while options are being evaluated, Smyth continues to believe that there are reasonable prospects of bailing out the company.

“The business is generating liquidity. New and quality content is being incorporated that is increasing attendance and we are following the most important trends in the market in [recovery], helped by [the] launch of the vaccine, “added Smyth.

“Our exit options to recapitalize the business are up and running. We have forecast a fourth wave, so we are in a position to manage and mitigate the effect of a fourth wave, should it occur. We are focused on the upward trajectory of a strong recovery in aid and an exit from the corporate bailout. ”

Ster-Kinerkor says he remains committed to his plans to exit the corporate bailout and his positive progress on the “leader” deal.

“We are increasingly focused on options to go out of business and we intend to publish a rescue plan as soon as possible. Good progress has been made with the ‘lead’ deal with due diligence expected to be completed in the next two weeks. Other potential stakeholders continue to be aware of the process, ”Smyth noted.

Additionally, BRP has already signed a term sheet regarding the previously proposed agreement.

Smyth is set up to continue to monitor trading activities in accordance with its legal obligations and decisions that have been made online with this search include (but are not limited to):

  • Evaluation and acceptance of creditor claims
  • Liquidity assessment and continuous monitoring
  • Development of a detailed and ‘fit for purpose’ three-year financial model per site along with regular and ongoing updates necessary for any significant changes in the outlook for the expected ‘payback period’
  • Completion of detailed strategic and financial assessments of each operational site
  • Ongoing discussions with stakeholders regarding possible rescue exit options.

In due course, more updates to the business rescue process will follow.

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