By Joe Hoppe
Cineworld Group said Thursday that its proposed restructuring has the backing of lenders controlling almost all of its legacy credit lines and most of the outstanding debt under its debtor-in-possession facility.
The London-based cinema company–which owns Regal Cinemas–said more lenders under its term loans due in 2025 and 2026 and revolving credit line due this year, have agreed to amended and restated versions of the restructuring support agreement and the backstop commitment agreement, first filed in early April in the U.S. Bankruptcy Court.
Now, the proposed restructuring has support of those holding and controlling 99% of the legacy credit lines and at least 69% of the outstanding indebtedness under the debtor-in-possession facility, the company said.
The proposed restructuring is expected to reduce indebtedness by around $4.53 billion, raise $800 million and provide $1.46 billion in new debt financing, the company said on April 3. The proposed restructuring doesn’t provide for any recovery for holders of Cineworld’s existing equity interests.
Cineworld now expects to emerge from Chapter 11 bankruptcy in July. During the restructuring, the company has continued to operate its business and cinemas as usual, it said.
Cineworld entered into Chapter 11 in September, with around $1.94 billion of debt, and had been in talks with stakeholders since then to develop a reorganization plan to maximize value. The company’s shares fell in late February after it said it had received a number of proposals from potential parties to buy some or all of its business, but none involve an all-cash bid for the entire company, leaving shareholders empty handed
During its bankruptcy process, AMC Entertainment held discussions regarding a potential strategic acquisition of theaters and talks about reviving a previously scrapped merger with Cineplex were also held
In early April, Cineworld said it had entered a restructuring support agreement and a backstop commitment agreement with some lenders. At the same time, Cineworld said the marketing process in the U.S., the U.K. and Ireland will be terminated. Proposals for the rest of the world business–outside of the U.S., the U.K. and Ireland–continued to be considered, it said.
Write to Joe Hoppe at joseph.hoppe@wsj.com