Cineplex are authorized to issue an unlimited
number of common shares (“Annual
Information Form”).
On March 24th, 2016 they have issued a total of 63,410,009 common
shares (“Annual Information
Form”). Common shares
are entitled to one vote per share at shareholder meetings (“Annual Information Form”). The Corporation is also authorized to issue
10,000,000, preferred shares, none are outstanding (“Annual Information Form”). Preferred shareholders have such right and
privileges over common shareholders which are determined by the Board (“Annual Information Form”). Preferred shareholder do not have the right
to vote at Shareholder meetings (“Annual Information Form”). They also have the right to liquidation of
assets, and payment of dividends and are entitled to this before common
shareholder whether voluntary or involuntary (“Annual Information Form”). 
Cineplex’s dividend policy and varies on factors such as the result of
their operations, financial health of the company, number of business
opportunities, contractual restrictions, cash requirements and other factors (“Annual Information Form”). Cineplex declared a dividend of $8,575.
Cineplex pays a monthly dividend and was increased to $0.13 per month per Share
($1.56 on an annual basis) (“Annual
Information Form”).
Their credit faculties are repayable at full at maturity, with no scheduled
payment of credit prior to maturity date (“Annual Information Form”). The face value of current and long-term debt
reflects fair value, as the debt bears floating interest at market rates (“Annual Information Form”). This is based on Canadian dollar prime rates
or bankers’ acceptance rates (“Annual
Information Form”).
The average interest rate on borrowings
under the Credit Facilities was 2.85% for the year ended December 31, 2016 (“Annual Information Form”). Cineplex
pays a commitment fee on the daily unadvanced portion of the Revolving
Facility, which will varies based on certain financial ratios and was 0.28% at
December 31, 2016 (“Annual Information
Form”). Long term debt ranges from $229,754 to $222,340 in 2014
and 2015 respectively, and then to $297,496 in 2016. Return on Shareholders’ equity decreased from 15.69% to 9.08% from
2015 to 2016 respectively (“Cineplex 2016 Annual Report”). As some Cineplex shareholders, its debt levels are
high and return on equity is decreasing as years progress for shareholder’s,
this is concern for shareholders because Cineplex is able to utilize
its borrowings efficiently in order to generate cash flow (“What You Must Know About
Cineplex Inc’s (TSX:CGX) Financial Strength”). But, its low liquidity raises
concerns over whether short term obligations can be met in time, and raising
further debt to meet these expenses could be challenging in the future for their
shareholders (“What You Must Know About Cineplex Inc’s (TSX:CGX) Financial Strength”).
Its operating cash flow seems adequate to meet obligations which means its debt
is being put to good use (“Annual
Information Form”). However, the company may struggle to meet
its near-term liabilities and should make changed to ensure that shareholders
are not worried about what they are buying shares in (“What You Must Know About
Cineplex Inc’s (TSX:CGX) Financial Strength”).