Cineworld Group Plc – Sale and Leaseback of Additional 18 US Cinemas

13 June 2019

Further to the announcement made by Cineworld on 15 May 2019, Cineworld today announces 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:

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.”

About Cineworld Group plc

Cineworld Group plc was founded in 1995 and listed its shares on the London Stock Exchange in May 2007. The company has grown through expansion and by acquisition to become the second largest cinema chain worldwide, holding the number one or number two position by number of screens in each of its regions. Cineworld currently operates 9,503 screens across 788 sites in the US, UK, Ireland, Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Israel.

About EPR Properties

EPR Properties is a specialty real estate investment trust (REIT) that invests in properties in select market segments which require unique industry knowledge, while offering the potential for stable and attractive returns. The company's investments exceed $6.9 billion and its primary investment segments are Entertainment, Recreation and Education. The company adheres to rigorous underwriting and investing criteria centered on key industry and property level cash flow standards. The company believes its focused niche approach provides a competitive advantage, and the potential for higher growth and better yields.