Cineworld drops major sale plan, proposes new debt deal

(Reuters) – Cineworld (CINE.L) said on Monday it had canceled plans to sell its US, UK and Ireland businesses after failing to find a buyer, as it proposed a new debt restructuring plan.

The world’s second-largest operator of movie chains after AMC Entertainment (AMC.N) filed the majority of the business under Chapter 11 bankruptcy protection in the United States in September.

Under a new tentative deal with lenders, it said it aims to reduce debt by about $4.53 billion, mainly through creditors acquiring shares in a reorganized group.

Its net debt is $8.81 billion including lease liabilities as of June 2022.

The plan also includes raising $2.26 billion to emerge from bankruptcy this year.

“This agreement with our lenders represents a ‘vote of confidence’ in our business and significantly advances Cineworld toward achieving its long-term strategy in a changing entertainment environment,” CEO Mooky Greidinger said in a statement.

Cineworld cinema near Manchester, Britain, October 4, 2020. REUTERS/Phil Noble

“Cineworld has determined that, in the absence of an all-cash supply significantly in excess of the value specified under the proposed restructuring, marketing will be terminated as it relates to the Group’s business in the United States, United Kingdom and Ireland.” a permit.

The company said it will continue to consider proposals to sell its “rest of the world” business, which made up about 13% of its revenue in 2021 and includes operations in Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Israel.

Sky News reported that private equity firm CVC Capital Partners and activist investor Elliott Management last month proposed separate takeover offers for its operations in Eastern Europe and Israel.

See also  US wants airlines to increase aid for stranded and delayed passengers

Shares in the London-listed company are down more than 99% from their all-time high in 2017.

On Monday, it plunged as much as 38% to 1.8 pence in early trade.

The company has reiterated that shareholders will be eliminated under the restructuring plans.

Additional reporting by Abi Jose Quilparambil and Yadarissa Chapong in Bengaluru; Editing by Louise Heavens and Jason Neely

Our standards: Thomson Reuters Trust Principles.

Leave a Reply

Your email address will not be published. Required fields are marked *