UK-based theater chain, Cinemaworld, has announced that it expects to leave its Chapter 11 status by this July. With about $8.8 billion in debt, the company filed for Chapter 11 bankruptcy last September to help reorganize its affairs.
After months of many holdouts, almost 100% of Cinemaworld’s legacy lenders have been able to come to an agreement over how the company should be restructured to maintain its expenses. According to a statement by the company, all of these lenders hold about 99% of the legacy debts and 69% of the company’s own debts, and they are all “certain of its subsidiaries.” After presenting the plan to the U.S. Bankruptcy Court in the South District of Texas, the court gave its approval, giving Cineworld its confidence to come out by July.
Thanks to lost money from the pandemic, the purchase of its offspring company Regal Cinemas, and poor market sales, the branch’s debt nearly crippled the company. This plan will help wipe the company by about $4.53 billion through $2.3 billion in exit financing, a $1.46 billion loan, and $800 million from equity shares. Unfortunately, most of the shareholders will continue to stay in the red. Cinemaworld might be able to recover, but its plan also wipes out its high stock prices and could cause it to be delisted from the stock market.
Even while they restructure, Cinemaworld and Regal plan on continuing to operate their theaters in all of their branches. “The Group continues to honor the terms of all existing customer membership programs, including Regal Unlimited and Regal Crown Club in the United States and Cineworld Unlimited in the UK,” Cinemaworld announces.
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