Village Roadshow secures $70 million from lenders and Queensland Government to cover costs

Village Roadshow has secured further funding from the Queensland Government to help cover the operational costs of its business for the next year.

Village Roadshow has secured a further $70 million in financing, saying coronavirus restrictions are still causing operations to run on a negative cash basis.

In a statement provided to the Australian Stock Exchange on Thursday, the Gold Coast theme park owner said the funding had come from existing lenders and the Queensland Treasury Corporation, with the debt facility intended to cover costs for the next 12 months.

It also announced a minimum $35 million shareholder equity raising in an attempt to boost its liquidity buffers.

Easing COVID-19 restrictions in Queensland has allowed Movie World and Sea World to reopen with the attraction parks operating at 50 per cent capacity. Village said Queensland theme parks were being propped up by local admissions.

Queensland theme parks are being propped up by local admissions. Picture: NCA NewsWire /Steve Holland

However, stage four restrictions have forced Village to close its cinemas in the greater Melbourne metropolitan area and some parts of regional Victoria.

“Previous monthly net cash costs of negative $10-$15 million per month has reduced; however, the company is still operating on a negative cash basis which it expects will continue for several months,” Village said in its statement.

At June 30, Village had a net debt position of $280 million, with only $5 million remaining in undrawn debt facilities. It also had $40 million in unrestricted cash reserves.

Village said the majority of its workforce had been retained due to Federal Government JobKeeper payments.

Village is expecting the pause on new movies to ease, with box office ticket sales likely to resume in the next month or so.

“There have been significant deferrals in the release schedule of some major films; however, it is expected that film product will start to become more available from late August or early September 2020,” the company said.

Village has previously noted it was delaying large capital expenditure in its cinema operations, while pre-committed spending in its theme parks will continue, primarily at Sea World’s new Atlantis precinct.