Marcus Corp. receiving $91 million loan as business addresses impact of COVID-19

CEO says money will help it 'weather the storm' well into 2021

Last updated on May 1st, 2020 at 07:22 pm

Milwaukee-based Marcus Corp. is receiving a loan of nearly $91 million to help the company weather the storm that has resulted from the COVID-19 coronavirus pandemic.

On Thursday, the company announced it is receiving the $90.8 million 364-day loan “to further solidify The Marcus Corporation’s already strong balance sheet.”

The loan is through an existing agreement between Marcus and several banks, including JPMorgan Chase Bank as administrative agent and U.S. Bank as syndication agent. Marcus will use the proceeds for a few things, including to repay debt under its existing $225 million revolving credit facility, pay costs and expenses related to the new agreement and for general corporate purposes.

The agreement requires the company to pause quarterly dividend payments through the remainder of 2020, and limits the total amount of quarterly dividend payments during the first half of fiscal year 2021.

In the announcement, company president and chief executive officer Greg Marcus said Marcus Corp. has been “conservatively run” since its founding 85 years ago.

“This philosophy has enabled us to weather numerous storms in the past and has positioned us well to weather the current crisis,” he said.

Marcus said even if its theaters and hotels were to remain closed the rest of the year, Marcus Corp. has enough cash to sustain operations even without the new loan.

“With today’s announcement, we have provided for an additional ‘insurance policy’ to further enhance our liquidity, which we believe positions The Marcus Corporation to weather this current storm well into 2021, if needed,” Marcus said.

The loan is not the only financing Marcus is receiving during the COVID-19 outbreak. It is also receiving money through the federal government’s Paycheck Protection Program for some of its hotels such as the Hilton Milwaukee City Center. The company declined to provide BizTimes a full picture of how much PPP money it is receiving and which of its hotels and resorts is receiving that funding. The Milwaukee Journal Sentinel reported that the company is receiving $11 million from the PPP.

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Alex Zank
Alex Zank covers commercial and residential real estate for BizTimes. Alex previously worked for Farm Equipment magazine and also covered statewide construction news at The Daily Reporter. He graduated from the University of Wisconsin-Eau Claire, where he studied journalism, political science and economics. Having grown up in rural western Wisconsin, Alex loves all things outdoors, including camping, hiking, four-wheeling and hunting.