South Africa’s largest cinema chain, Ster-Kinekor, has been placed into voluntary business rescue after it fell victim to the Covid-19 lockdown measures, which forced it into a loss-making position.
“As a result of the Covid-19 pandemic and the consequent economic lockdown instituted by the South African government at the end of March 2020, all cinemas were required to shut down, and were only permitted to reopen under strict conditions as from the end of August 2020,” the company said in a statement.
“Since then, the company has been operating under various forms of restriction, including curfews and mandatory limits to the number of guests per auditorium.”
A lack of high-profile movie releases in the coming months also meant further challenges likely lie ahead.
“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,” it said.
EY South Africa partner Stefan Smyth has been appointed as business rescue practitioner.
TechCentral understands that Ster-Kinekor, which was owned by Primedia until 2018, is owned by the Mineworkers Investment Company, Ethos Private Equity, Rand Merchant Bank and Old Mutual.
Cinema goers will still be able to watch movies at Ster-Kinekor theatres during the business rescue proceedings. — (c) 2021 NewsCentral Media