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Cineworld Group PLC on Monday said it has entered into a restructuring support agreement and backstop commitment agreement with lenders to support its financing plan. Shares in the Brentford, London-based cinema chain fell 26% to 2.14 pence each in London on Monday morning. Cineworld was hit hard during the Covid-19 pandemic, as it saw the enforced closure of its cinemas. It also backed out of an acquisition agreement in Canada, leading to a legal battle. Cineworld said that the financial restructuring will see it raise $800 million through an equity offering to its lenders, as well as $1.46 billion in new debt financing from its lenders, with these funds expected to reduce Cineworld’s $4.53 billion in debt. Cineworld noted that the lenders involved hold 83% of its loans due in 2025 and 2026, and its revolving credit facility due 2023. The firm said the proposed restructuring ‘does not provide any recovery for holders of Cineworld’s existing equity interests’, meaning that shareholders are set to receive nothing back as the firm’s creditors receive 100% equity. Completion of the restructuring is subject to conditions including approval from Cineworld’s creditors, confirmation by the US bankrupt court for the Southern District of Texas, and Cineworld’s entry of a revolving credit facility of up to $200 million. The company, which first announced its Chapter 11 filing in September last year, said it expects to emerge from Chapter 11 proceedings in the first half of 2023. Cineworld noted that it has terminated marketing for the sale of its US and UK & Ireland business, but that it will continue to consider proposals for the purchase of its rest of the world business. Chief Executive Officer Mooky Greidinger said: ‘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’.’ Copyright 2023 Alliance News Ltd. All Rights Reserved.
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