Ster-Kinekor enters business rescue, but cinemas will stay open
Ster-Kinekor said its board of directors took the decision in an attempt to facilitate the rehabilitation of the company
Ster-Kinekor announced on Friday that it had commenced voluntary business rescue proceedings on Wednesday, despite its theatres being open nationwide.
In a statement, Ster-Kinekor said its board of directors took the decision in an attempt to facilitate the rehabilitation of the company.
As a result of the Covid-19 pandemic and the lockdown instituted by government at the end of March 2020, all cinemas were required to shut down, and only permitted to reopen under strict conditions as from the end of August 2020.
“Since then the company has been operating under various forms of restriction, including curfews and mandatory limits to the number of guests per auditorium. In addition, there has been an impact of the rescheduling of blockbuster film contents from the original date,” the statement read.
It said the continued lack of content for the next four to five months meant that the business was heading for further operational and cash flow challenges.
“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, once operating restrictions have been lifted, when international film distributions start to flow again.”
Ster-Kinekor acting CEO Motheo Matsau said: “For our customers, it is important to note that our cinemas remain open for business. Movie goers can continue to book their movie tickets through our website, app or in-store. All cinemas have instituted strict Covid-19 protocols, which mean temperature checks and hand sanitising on arrival and inside the auditoria and mask wearing as appropriate. Every two seats are kept vacant for social distancing.”
Stefan Smyth, a partner at EY SA, where he leads their Africa turnaround and restructuring strategy practice, has been appointed as the business rescue practitioner.
“The business rescue practitioner operates as an independent party who, together with the board and executive team, will oversee the business rescue as defined by chapter 6 of the Companies Act. The business rescue practitioner will, on a temporary basis, supervise the management, affairs and business of the company and will devise, prepare, develop and implement a plan to rescue the company,” the statement read.
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