13th Jun 2019 09:36
(Alliance News) - Cineworld Group PLC said Thursday it has completed the sale and leaseback of 18 US cinemas, the second such deal in a month, and will return half the proceeds to shareholders.
The deal sees Cineworld selling the multi-screen cinemas to a subsidiary of EPR Properties for USD270.0 million in cash and then leasing them back under a 15-year lease.
At the end of 2018, the cinemas, which have a combined total of 255 screens, had a book value of USD230 million.
In mid-May, Cineworld had completed a USD286.3 million sale and leaseback of 17 US multi-screen cinemas, totalling 251 screens, to subsidiaries of Realty Income Corp.
Cineworld said it has considered what to do with the combined USD556.3 million in cash from the two deals and has decided to use half to reduce its gross debt and return the other half to shareholders in the form of a special dividend.
The company will pay a special dividend of 20.27 US cents per share, giving an aggregate value of USD278.1 million.
"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," said Chair Anthony Bloom.
Chief Executive Mooky Greidinger added: "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."
Following the two deals, the company said it remains "comfortably" on track to deliver reduced leverage in line with expectations.
Shares in Cineworld were down 3.1% Thursday at 275.90 pence each.
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CINE.L