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Further to its April 3 announcement that it had reached a conditional agreement with lenders to emerge from Chapter 11, Regal owner Cineworld today submitted its reorganization plan to the U.S. Bankruptcy Court for the Southern District of Texas.
In a filing to the London Stock Exchange where its shares are traded, the exhibition giant reiterated that it expects to emerge from the Chapter 11 cases during the first half of 2023. The group also said it remains committed to getting there “as expeditiously as possible” although, among other things, any sale transaction may delay that beyond the first semester.
On April 3, the group said it had received non-binding proposals for some or all of the its assets but determined that absent an all-cash bid significantly in excess of the value established under the proposed restructuring, it will cease seeking a buyer for its businesses in the U.S., UK and Ireland. The chain will continue to consider the proposals received for its “rest of world” business, it said at the time.
The restructuring plan is supported by lenders holding and controlling approximately 83% of the group’s term loans due 2025 and 2026 and revolving credit facility due 2023, and approximately 69% of the debtors’ outstanding indebtedness under the debtor-in-possession financing facility.
The plan, which remains subject to approval from the Bankruptcy Court, also contemplates, among other things, a proposed restructuring of the group Chapter 11 companies. Certain creditor approvals, among other requirements, will need to be obtained in order for the Bankruptcy Court to confirm the plan.
Further, consistent with the April 3 statement, in light of the level of existing debt that is proposed to be released under the plan, the proposed restructuring does not provide for any recovery for holders of Cineworld’s existing equity interests.
During the restructuring process, Cineworld continues to operate its global business and cinemas as usual without interruption. The group continues to honor the terms of all existing customer membership programs, it said.
In the April 3 statement, Cineworld CEO Mooky Greidinger called the restructuring agreement “a vote of confidence in our business” which “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’.”
Cineworld filed for bankruptcy last fall in the Texas court. It has allowed Regal to shutter theaters and renegotiate leases with landlords. In late March, Judge Marvin Isgur said he was sticking with an April 20 date to go over the plan and set May 26 as a confirmation date.