All Ster-Kinekor cinemas will remain open despite the company having been placed under business rescue last week.
The board of directors of Ster-Kinekor Theatres Proprietary Limited on Friday announced that the company had commenced voluntary business rescue proceedings with effect from 27 January in terms of the Companies Act.
Stefan Smyth, a partner at EY South Africa, where he leads their Africa turnaround and restructuring strategy practice, has been appointed as the business rescue practitioner.
He says until Covid-19 hit in March last year, the business was profitable with good prospects in the future.
But due to the lockdown, all cinemas were required to shut down and were only permitted to reopen under strict conditions as of the end of August 2020.
Since then the company had been operating under various forms of restrictions, including curfews and mandatory limits to the number of guests per auditorium.
In addition, many Hollywood blockbusters had been rescheduled.
The second Coronavirus wave hit South Africa and other countries in December 2020, with further lockdown measures and curfews reintroduced across the cinemas.
These factors meant that Ster-Kinekor had been trading at a loss.
“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,” the statement said.
The cinemas remain open for business with strict Covid-19 protocols, which include every two seats being kept vacant.