Cineworld Announces Plan To Emerge From Bankruptcy By July

Photo via Regal on Instagram

Cineworld Announces Plan To Emerge From Bankruptcy By July

By Movieguide® Contributor

Cineworld, Regal Cinemas’ parent company, has announced that they expect to exit Chapter 11 bankruptcy in July. 

The theater chain filed for bankruptcy last September. At the time of filing, Cineworld’s debt stood at around $8.8 billion. 

Part of Cineworld’s plan to come out of bankruptcy involves a proposed restructuring that “has the support of lenders holding and controlling approximately 99% of the Legacy Facilities and at least 69% of the outstanding indebtedness under the debtor-in-possession facility of Cineworld and certain of its subsidiaries,” according to a statement from the company. 

Cineworld also ran a sales process, attempting to sell off assets, but stated that the offers that came in were too low to impact their debt. 

While this plan will get Cineworld out of bankruptcy, it does not do anything for shareholders. Shares of Cineworld have plummeted and are expected to be delisted. 

Cineworld stated that they are committed to coming out of bankruptcy and will continue “to operate its global business and cinemas as usual without interruption.”

Movieguide® previously reported on Cineworld’s bankruptcy filing:

Debt pile-up, accentuated by the COVID-19 pandemic, has forced Cineworld Group, which owns Regal Cinemas in the U.S., to move forward with Chapter 11 cases in the United States Bankruptcy Court for the Southern District of Texas.

“As part of the Chapter 11 cases, Cineworld, with the expected support of its secured lenders, will seek to implement a de-leveraging transaction that will significantly reduce the Group’s debt, strengthen its balance sheet and provide the financial strength and flexibility to accelerate, and capitalize on, Cineworld’s strategy in the cinema industry,” a Cineworld statement reads.

“The Group Chapter 11 Companies enter the Chapter 11 cases with commitments for an approximate $1.94 billion debtor-in-possession financing facility from existing lenders, which will help ensure Cineworld’s operations continue in the ordinary course while Cineworld implements its reorganization,” the statement continued.

Cineworld also announced a plan to “pursue a real estate optimisation strategy in the U.S. and intends to engage in collaborative discussions with U.S. landlords to improve U.S. cinema lease terms in an effort to further position the group for long-term growth.”

The announcement concluded that global and U.S. operations and business would continue despite their debt.

“We have an incredible team across Cineworld laser focused on evolving our business to thrive during the comeback of the cinema industry,” Cineworld CEO Mooky Greidinger said. “The pandemic was an incredibly difficult time for our business, with the enforced closure of cinemas and huge disruption to film schedules that has led us to this point.”

“This latest process is part of our ongoing efforts to strengthen our financial position and is in pursuit of a de-leveraging that will create a more resilient capital structure and effective business. This will allow us to continue to execute our strategy to reimagine the most immersive cinema experiences for our guests through the latest and most cutting- edge screen formats and enhancements to our flagship theatres. Our goal remains to further accelerate our strategy so we can grow our position as the best place to watch a movie,” Greidinger continued.

Cineworld accounts for 9,139 screens globally.

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