Movie theater giant Cineworld said early Monday London time that it has struck an agreement with lenders that would see it emerge from Chapter 11 bankruptcy via a restructuring.
The company said it still expects to emerge from its Chapter 11 cases during the first half of 2023, even though the process could delay this beyond the first half. Cineworld said it “remains committed to emerging from the Chapter 11 cases as expeditiously as possible.”
The proposed restructuring is due to reduce the firm’s indebtedness by about $4.53 billion, mainly through lenders getting equity in the reorganized group in exchange for releasing their claims.
The lenders party agreed, “subject to the execution of definitive documentation and certain other conditions,” to support a proposed restructuring, including a commitment to provide an exit financing facility and backstop an equity rights offering. The plan is for the restructuring to be implemented through a plan of reorganization in the company’s Chapter 11 cases.
“The proposed restructuring does not provide for any recovery for holders of Cineworld’s existing equity interests,” it said.
Said CEO Mooky Greidinger: “This agreement with our lenders represents a ‘vote-of-confidence’ in our business and significantly advances Cineworld towards achieving its long-term strategy in a changing entertainment environment. With a growing slate of blockbusters and audiences returning to cinemas in increasing numbers, Cineworld is poised to continue offering moviegoers the most immersive cinema experiences and maintain its position as the ‘Best Place to Watch a Movie’.”
The lenders that are part of the agreement are controlling approximately 83 percent of the group’s term loans due 2025 and 2026 and revolving credit facility due 2023.