Cineworld shareholders wiped out in restructuring plan
The bankrupt cinema chain Cineworld is set to be taken over by its creditors. The new deal intends to restructure the company’s multi-billion-dollar debts and keep the company in business on a global scale. The deal includes a $1.46billion loan facility plus a new share offering of $800million, giving creditors a 100% stake in the company.
Founded in Stevenage and now headquartered in Brentford, Cineworld is the world’s second-largest cinema chain, with 9,518 screens across 790 sites in 10 countries: Bulgaria, Czech Republic, Hungary, Ireland, Israel, Poland, Romania, Slovakia, the United Kingdom and the United States.
The cinema giant has announced that the new deal with creditors will cut debts by $4.53billion, allowing them to remain competitive in the market. The company filed for bankruptcy protection in September 2022 after a long stretch of closures amid the Covid-19 pandemic of 2020-21.
At the beginning of 2023, Cineworld announced that they were looking to sell the company, with rival Vue reportedly making a bid for the Cineworld assets. In light of the new deal, Cineworld has now revealed they will no longer be looking to sell their US, UK and Ireland businesses but will keep options open for their operations elsewhere.
“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,” CEO Mooky Greidinger said in a new statement.
Adding: “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 new restructuring deal must still be voted on by the creditors, which includes Blackstone, Invesco and Sixth Street Partners, and approved by a Texas bankruptcy court. Cineworld expects the deal to go through and hopes to exit bankruptcy protection in the first half of this year. Any sale of the company’s “rest of world” business could delay this forecast, however.
See the trailer for ‘Dungeons & Dragons: Honor Among Thieves’, available in Cineworld cinemas now.
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