Cineworld Royal Owner Bankruptcy Proceedings Begin – The Hollywood Reporter
Exhibition giant and owner of Regal, Cineworld Group, has filed for Chapter 11 bankruptcy proceedings in the United States, saying on Wednesday that it had “commenced business under Chapter 11” before the United States Bankruptcy Court for the Southern District of Texas.
“As part of the Chapter 11 cases, Cineworld, with the expected support of its secured lenders, will seek to implement a deleveraging operation that will significantly reduce the group’s debt, strengthen its balance sheet and provide the necessary financial strength and flexibility. to accelerate, and capitalize on Cineworld’s strategy in the movie industry,” the second-largest movie theater chain explained. “The Group’s Chapter 11 companies are entering Chapter 11 business with commitments for a debtor-in-possession financing facility of approximately $1.94 billion from existing lenders, which will help ensure that the operations of Cineworld will continue in the normal course as Cineworld implements its reorganization.”
The filing of a proposed plan of reorganization with the bankruptcy court would occur “in due time,” with the goal of getting out of Chapter 11 “as soon as possible,” the firm said. “Cineworld currently expects to exit Chapter 11 in the first quarter of 2023 and is confident that a comprehensive financial restructuring is in the best interests of the group and its stakeholders, taken as a whole, over the long term.”
The London-based company operates Regal cinemas in the US, as well as Cineworld and Picturehouse theaters in the UK. Overall, it operates 747 sites and 9,139 screens in 10 countries.
As part of its restructuring, it said it would “pursue a strategy of optimizing real estate in the United States and intends to engage in collaborative discussions with U.S. landlords to improve rental terms for US theaters in an effort to further position the group for long-term growth.”
The cinema central reiterated that any deleveraging operation would lead to a “very significant dilution of the existing participations”, that is to say the participations, adding that “there is no guarantee of recovery for the holders of participations existing”. The company does not expect the Chapter 11 filing to result in a suspension of trading in its shares on the London Stock Exchange.
The debt-ridden company, led by CEO Moshe “Mooky” Greidinger, said in an August 17 statement that it was considering unspecified strategic options as it struggled to weather the summer slump for Hollywood tentpoles in its theatres. The the wall street journal later stated that Cineworld was preparing to file for bankruptcy and begin Chapter 11 proceedings in the United States, while also considering insolvency proceedings in the United Kingdom.
Chapter 11 bankruptcy protection offers the world’s second-largest exhibitor a way to continue operations, while securing the capital needed to continue the box office revenue recovery in the wake of the COVID pandemic.
“We have an incredible team across Cineworld who are focused on evolving our business to thrive during the cinema industry’s comeback,” Greidinger said. “The pandemic has been an incredibly difficult time for our business, with the forced closure of cinemas and a huge disruption to movie times that has gotten us to this point. This latest process is part of our ongoing efforts to strengthen our financial position and targets deleveraging that will create a more resilient capital structure and an efficient business. This will allow us to continue executing our strategy to reinvent the most immersive cinematic experiences for our customers through the latest and most advanced screen formats and enhancements to our flagship theaters. Our objective remains to further accelerate our strategy in order to be able to strengthen our position as the “best place to watch a movie”.
Cineworld had warned in mid-August that its admission levels had fallen below its expectations. The weaker trends were “due to a limited film slate which is expected to continue through November 2022 and is expected to negatively impact trading and the group’s liquidity position in the near term,” he said.