Cineworld reaches conditional settlement with lenders to emerge from Chapter 11 – deadline

Regal’s owner Cineworld has entered into a restructuring support agreement and a backstop commitment agreement with lenders that, if approved, will emerge from bankruptcy.

The exhibition giant also noted today that it has received non-binding offers for some or all of the group’s assets, but has determined that absent an all-cash bid in excess of the price established under the proposed restructuring. Yes, for this the search for a buyer will stop. Its businesses in the US, UK and Ireland. The chain will continue to consider proposals received for its “Rest of the World” business. A process is underway with bidders for those holdings to assess whether an acceptable sale transaction can be completed.

If the proposed reorganization is implemented, it is expected that the funded indebtedness of group Chapter 11 companies will be reduced by approximately $4.53 billion, primarily through lenders under legacy facilities to settle their claims in exchange for receiving equity in the restructured group. to issue.

It will raise $800 million in total gross proceeds through a fully backstopped equity offering to so-called “legacy lenders” and a direct equity offering to some of them. The reorganization group will provide $1.46 billion in new debt financing to Chapter 11 companies upon their emergence from Chapter 11 cases.

The proceeds of the rights offering and exit facility will be used to, inter alia: fully pay off the debtor-in-possession financing facility of approximately $1.94 billion by group Chapter 11 companies and fund costs associated with the process and go-forward business operations.

Cineworld CEO Mookie Greidinger called the restructuring agreement a “vote of confidence in our business” that “advances Cineworld significantly toward achieving its long-term strategy in a changing entertainment environment. A growing number of blockbusters and a larger number of With audiences returning to cinema halls in 2017, Cineworld is set to continue to offer moviegoers the most immersive cinema experience and maintain its position as ‘The Best Place to Watch Movies’.

In light of the existing level of debt to be issued under the plan, consistent with the Company’s announcement on February 24, the proposed reorganization does not provide for any recovery for holders of Cineworld’s existing equity interests.

Cineworld said it expects to emerge from the Chapter 11 cases during the first half of 2023, but that any sale transaction could be delayed, among other things. The group said it was committed to emerging from the cases “as quickly as possible”. The plan still needs to be approved by Chapter 11 companies for the Southern District of Texas, as well as by the expected threshold of the United States Bankruptcy Court.

Cineworld filed for bankruptcy in that court last fall. This has allowed Regal to close theaters and renegotiate with landlords. Last week, Judge Marvin Isgur said he stuck to the April 20 date for going over the plan and set May 26 as a confirmation date.

Lenders in question control about 83% of the troubled company’s term loans due in 2025 and 2026 and the revolving credit facility due in 2023.