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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 rights and
privileges over common shareholders which are determined by the Board (“Annual Information Form”). Preferred shareholders do not have the right
to vote at Shareholder meetings (“Annual Information Form”). They have the right to liquidation of
assets, and payment of dividends and are entitled to this before common shareholders
because it is an obligation (“Annual
Information Form”).  Cineplex’s dividend policy 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 mature on April 26,
2021 and 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% at December 31, 2016 (“Annual Information Form”). Cineplex
pays a commitment fee on the unadvanced portion of the Revolving Facility (“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 (“Annual Information
Form”). Return on Shareholders’ equity decreased from
15.69% to 9.08% from 2015 to 2016 respectively. 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. Their 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. Their operating cash
flow seems moderate 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.

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