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$51.78 -0.2  -0.3%

Last Trade - 09/04/21

Sector
Consumer Defensives
Size
Mid Cap
Market Cap £1.92bn
Enterprise Value £1.86bn
Revenue £1.88bn
Position in Universe 1992nd / 6827

S.African cinema group Ster-Kinekor, hit by COVID-19 curbs, files for bankruptcy

Fri 29th January, 2021 8:34pm
JOHANNESBURG, Jan 29 (Reuters) - South Africa's
Ster-Kinekor, Africa's largest cinema group, has filed for
voluntary bankruptcy, the firm said on Friday, citing losses due
to COVID-19 and related restrictions prohibiting large
gatherings in public spaces. 
    With over 1.4 million cases, South Africa has the
continent's highest number of coronavirus infections.
    The country has been in lockdown since March. Restrictions
were eased but ramped up again when cases soared following the
discovery of a new coronavirus variant suspected of being more
infectious. 
    Business has suffered as consumers were forced to stay home
and also faced soaring unemployment. 
    Ster-Kinekor, which operates 55 commercial cinema complexes
in South Africa and seven in neighbouring Namibia, Zambia and
Zimbabwe, said in a statement it started voluntary business
rescue proceedings on Wednesday. 
    Business rescue is a local form bankruptcy protection. An
independent expert is appointed by the distressed company to
take over management with the aim of salvaging the business or
achieving an acceptable liquidation.
    The cinema group said the various stages of lockdown,
curfew, restrictions on gathering and delays in releases of
blockbuster films had hit revenues hard.
    "The continued lack of content for the next 4-5 months means
that the business is heading for further operational and cash
flow challenges," the firm said in a statement.
    "The board is of the view that the safe harbour that
business rescue provides, in terms of providing a legal
moratorium, will assist the business to return to
profitability."
    Rival cinema group Nu-Metro, which has around 30% share of
the market, has also reported falling revenues. 
    In 2019, films released in South Africa earned 1.2 billion
rand ($79.45 million), according to the National Film and Video
Foundation.
 ($1 = 15.1045 rand)

 (Reporting by Mfuneko Toyana
Editing by Sonya Hepinstall)
 ((mfuneko.toyana@thomsonreuters.com; +27117753153; Reuters
Messaging: mfuneko.toyana.thomsonreuters.com@reuters.net))
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