Cineworld Commences Chapter 11 Cases with Approximately $1.94 billion in Debtor-in-Possession Financing Commitments to Facilitate a Significant De-Leveraging Transaction and Position Company for Long-Term Growth
Cineworld Group has initiated a Chapter 11 restructuring process aimed at significantly reducing its debt and enhancing its balance sheet. The company has secured approximately
- Initiation of Chapter 11 process expected to significantly reduce debt.
- Secured approximately $1.94 billion in debtor-in-possession financing for ongoing operations.
- Business operations will continue uninterrupted during the restructuring process.
- Expected significant dilution of existing equity interests.
- No guarantee of recovery for holders of existing equity interests.
Chapter 11 restructuring process expected to significantly reduce debt and strengthen Cineworld’s balance sheet and liquidity position
De-leveraging transaction will allow Cineworld to accelerate, and capitalise on, its strategy in the cinema industry
Chapter 11 restructuring process involves entities that are engaged in Cineworld’s US,
Group cinemas remain open globally to guests and members; operations to continue without interruption
As part of the Chapter 11 cases, Cineworld, with the expected support of its secured lenders, will seek to implement a de-leveraging transaction that will significantly reduce the Group’s debt, strengthen its balance sheet and provide the financial strength and flexibility to accelerate, and capitalise on, Cineworld’s strategy in the cinema industry. The Group Chapter 11 Companies enter the Chapter 11 cases with commitments for an approximate
As previously announced, it is expected that any de-leveraging transaction will result in very significant dilution of existing equity interests in the Group and there is no guarantee of any recovery for holders of existing equity interests. The Company does not expect the Chapter 11 filing to result in a suspension of trading in its shares on the
The Group Chapter 11 Companies expect to file a proposed plan of reorganisation (the “Plan”) with the Court in due course and to meet the necessary requirements to emerge from Chapter 11 as expeditiously as possible. Cineworld currently anticipates emerging from Chapter 11 during 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, in the long term. Cineworld looks forward to working with its creditors and stakeholders to advance the Group’s efforts to restructure its balance sheet.
As part of its restructuring process, Cineworld expects to pursue a real estate optimisation strategy in the US and intends to engage in collaborative discussions with US landlords to improve US cinema lease terms in an effort to further position the Group for long-term growth.
Chapter 11 is a court-supervised process that will provide a forum for efficient reorganisation of the Group’s business and balance sheet. The Group Chapter 11 Companies will remain in possession and control of their assets, existing management and the board of directors will stay in control of the business and the Group’s operations will be allowed to continue uninterrupted.
Upon filing for relief under Chapter 11, the Group Chapter 11 Companies benefit from an “automatic stay” against any action to litigate or collect a pre-petition claim. Cineworld expects to operate its global business and cinemas as usual throughout this process.
Cineworld’s subsidiaries and affiliates not engaged in the US,
BUSINESS AS USUAL
During the restructuring process, Cineworld expects to operate its global business and cinemas as usual without interruption. In conjunction with the filing of the Chapter 11 cases, the Group Chapter 11 Companies have filed certain customary “first day” motions to obtain the requisite court authority for the Group to continue operating its businesses in the ordinary course without disruption to its customers, vendors, suppliers or employees as much as practicable. The Group Chapter 11 Companies intend to pay all vendors and suppliers in full and on normal terms for valid amounts for goods and services received during the Chapter 11 process. In addition, the Group expects that employees will continue to receive their usual wages and benefits without interruption.
Cineworld has secured commitments for an approximate
Cineworld and its brands around the world – including Regal, Cinema City, Picture House and yes Planet – are continuing to welcome customers to cinemas as usual, which will not change during the Chapter 11 cases. The Group expects to continue to honour the terms of all existing customer membership programs, including
ADDITIONAL INFORMATION REGARDING THE RESTRUCTURING PROCESS
Given the international nature of the Group’s business, certain aspects of the de-leveraging transaction to be pursued in the Chapter 11 cases may require ancillary implementation proceedings beyond the Chapter 11 cases. No final decision has been taken in relation to whether any such ancillary implementation proceedings are to be pursued in this case, and any final decision will be subject to a number of factors, nor has a decision been taken on the timing of any such process. However, the possible ancillary implementation proceeding that may be used by the Group in this case could include, among other things, a restructuring plan or a scheme of arrangement under Part 26A or Part 26 (respectively) of the
The lenders providing the DIP financing have also agreed to provide funding through the DIP financing for the purchase by a newly incorporated Group company of the outstanding commitments under the Rest of World facility (being the facility advanced to fund the Group’s operations in
Additional information on the Chapter 11 cases (including copies of all documents filed in the Chapter 11 cases) can be found at https://cases.ra.kroll.com/cineworld.
The person responsible for arranging the release of this announcement is
About Cineworld
Important information
This announcement is not intended to and does not constitute and should not be construed as, considered a part of, or relied on in connection with any information or offering memorandum, security purchase agreement, or offer, invitation or recommendation to underwrite, buy, subscribe for, otherwise acquire, or sell any securities or other financial instruments or interests or any other transaction.
This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Group and certain plans and objectives with respect thereto. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as “anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”, “goal”, “believe”, “hope”, “aims”, “continue”, “will”, “may”, “should”, “would”, “could”, or other words of similar meaning. These statements are based on assumptions and assessments made by the Group in light of their experience and their perception of historical trends, current conditions, future developments and other factors the Group believes appropriate. By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward-looking statements in this document could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and you are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this document. The Group does not assume any obligation to update or correct the information contained in this document (whether as a result of new information, future events or otherwise), except as required by applicable law.
There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions.
Nothing in this announcement is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings, profit or earnings or profit per share or dividend per share for the Group for the current or future financial years would necessarily match or exceed the historical published earnings, profit or earnings or profit per share or dividend per share for the Group.
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Nisan Cohen
+44 (0)20 8987 5000
investors@cineworld.co.uk
FGS Global (
+44 (0)20 7251 3801
CineworldMedia@fgsglobal.com
FGS Global (US):
+1 (646) 970-4727
CineworldMedia@fgsglobal.com
Source: Cineworld
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