Regal Cinemas’ Parent Announces Agreement With Lenders to Emerge From Chapter 11 Bankruptcy, Wall Street Not Impressed
April 3, 2023
Cineworld, the bankrupt British-based corporate parent to Regal Cinemas, April 3 announced it has entered into a restructuring agreement with lenders controlling about 83% of the company’s fiscal loans due in2025 and 2026 and revolving credit facility due this year.
The agreement, if accepted by a judge, would reduce the exhibitor’s debt by $4.53 billion, raise $800 million through a backstopped equity offering, and provide $1.46 billion in new debt financing.
In light of the level of existing debt that is expected to be forgiven under the restructuring plan, Cineworld said the new agreement with lenders does not provide for any recovery for the company’s shareholders. The received $1.94 billion debtor-in-possession fiscal support from lenders to maintain operations after filing Chapter 11 bankruptcy last September.
Cineworld is the No. 2 theatrical distributor, operating in 10 countries, including the U.S. and the U.K. with 747 sites and 9,139 screens globally.
“This agreement with our lenders represents a ‘vote-of-confidence’ in our business and significantly advances Cineworld towards achieving its long-term strategy in a changing entertainment environment,” CEO Mooky Greidinger said in a statement. “With a growing slate of movie blockbusters and moviegoers returning to cinemas in increasing numbers, Cineworld is poised to continue offering the most immersive cinema experiences.”
While Greidinger may think Cineworld received a vote of confidence, Wall Street has other ideas. The company’s stock opened April 3 down almost 32%.
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