Cineworld Enters Administration as Restructuring Moves Forward
UPDATED: The Cineworld cinema chain entered administration as expected on July 31. Simon J. Appell, Ian J. Partridge and Catherine M Williamson of AlixPartners U.K. LLP have been appointed as joint administrators of the group. From Aug. 1, the company’s shares will no longer be listed and traded on the London Stock Exchange.
“The restructuring of the group, which will be implemented by way of the administration process, will transform the group’s balance sheet and provide it with significant additional liquidity to fund its long-term strategy,” Cineworld said in a statement.
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PREVIOUSLY: The multinational Cineworld cinema chain has secured a new revolving credit facility of $250 million as part of its restructuring process.
Cineworld recently revealed details of a planned restructuring that will allow it to exit U.S. Chapter 11 bankruptcy strictures. The U.K.-listed company owns or operates cinemas in the U.K., continental Europe and the U.S.’s Regal chain.
While existing shareholders are largely wiped out, the restructuring moves include an $800 million rights issue, the release of some $4.35 billion of the group’s funded indebtedness and the provision of $1.71 billion of new debt financing. Within those new borrowings is a revolving credit facility secured since the group’s last statement a few weeks ago.
The restructuring will “transform the group’s balance sheet and provide it with significant additional liquidity to fund its long-term strategy,” Cineworld said in a statement on Friday.
The proposed restructuring also sees a continuation of administration by court-appointed administrators of Cineworld Group PLC, the U.K.-listed parent company.
The administration order does not apply to any of the operating companies or subsidiaries. And former Cinepolis boss Eduardo Acuna is poised to take over as Cineworld’s next CEO, replacing Mooky Greidinger.
The statement on Friday made it clear again that the restructuring does not provide for any recovery for holders of Cineworld’s existing equity interests.
The group has applied for trading in its existing shares on the London Stock Exchange to be suspended from Friday morning.
Cineworld Group and its subsidiaries had commenced Chapter 11 cases in the U.S. Bankruptcy Court in September 2022. The group now expects to emerge from Chapter 11 by July 31 and will continue to operate its cinemas as usual without interruption, it has said.
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