Movie theater chain Cineworld has announced a debt restructuring plan with the help of its biggest lenders to help it emerge from Chapter 11 bankruptcy.
The company entered bankruptcy proceedings in September, with debts and lease obligations worth $8.8 billion, the Financial Times reports.
Under the proposal, the lenders will reduce the cinema chain’s debts by $4.5 billion, receive a stake in the reorganized group, provide a new loan of $1.5 billion, and provide guarantees for the ownership rights of the securities for $800 million. Existing investors in the securities will probably get nothing.
Mooki Greidinger, CEO of Cineworld, said the deal was a “vote of confidence” in the company.
Last week, the Financial Times they were reported that the chain’s creditors were planning to oust Gradinger as part of a management review.
The second-largest cinema chain in the world filed for bankruptcy
The British company Cineworld Group, one of the largest in the entertainment industry and the second-largest cinema chain globally, has filed for bankruptcy.
Previously, The Wall Street Journal reported that the owner of Regal Cinemas was having a difficult time behind him and that his shares fell as much as 80 percent sometime in mid-August.
As the Guardian reports, Cineworld has only filed for bankruptcy protection in the US, and the intention is to restructure after the British giant faced low audience numbers.
The group has 751 cinemas, including more than 500 in the US, more than 100 in Britain and Ireland, and other facilities across Europe and Israel. It owns the Picturehouse chain in Britain and Regal Cinemas in the US.
In a statement, they stated that they are filing for Chapter 11 bankruptcy protection and that the restructuring process is under court supervision, which gives the companies time to negotiate with creditors to reach a debt reduction settlement.