The company told investors that the agreement is consistent with its model of operating a predominantly leasehold estate.
It is selling the cinemas to a subsidiary of EPR Properties for US$270mln and signing up for 15-year leases on ‘customary terms’. Cineworld noted that the cinemas had a book value of US$230mln in its accounts for the year ended 31 December 2019.
Today’s deal follows a similar agreement a month ago, which saw seventeen cinemas (251 screens) sold for US$286.3mln.
Cineworld pointed out that half the combined proceeds of US$556.3mln will be used to reduce debt and the other half will be returned to shareholders via a special dividend – it will pay a 20.27 US cents special dividend (amounting to US$278.1mln), with a record date of 21 June and a payment date in early July.
Both transactions follow-on from Cineworld’s 2018 acquisition of American cinema operator Regal Entertainment for US$3.5bn.
"I am very pleased to announce this further sale and leaseback transaction today,” said Mooky Greidinger, Cineworld's chief executive.
“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.”
Cineworld's chairman Anthony Bloom added: “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."