Cineworld said on Monday that as part of its proposed post-Chapter 11 restructuring, it expects to file for administration of its UK-listed unit Cineworld plc, but that its operating companies will continue business as usual without interruption.
Administration in the UK is a bankruptcy process, similar to a bankruptcy process. The world’s second-largest movie theater chain, which owns Regal in the US, filed for US bankruptcy protection in September, with proceedings in the Southern District of Texas ongoing. It is expected to emerge from Chapter 11 in the first half of July in the US
The UK administration’s application would only apply to Cineworld Group plc itself (as the group’s listed parent company) and not to any of its operating companies or subsidiaries. Any administration order will not affect the status or rights of any of the group’s employees and operations will not be affected by the process.
The proposed restructuring, when implemented, will transform the group’s balance sheet and provide it with significant additional liquidity to fund its long-term strategy. In particular, it will include the release of approximately $4.53 billion of the group’s funded debt, the execution of a fair offer to raise gross proceeds of $800 million and the provision of $1.46 billion in new debt financing.
Given the level of existing debt expected to be discharged under the plan, the proposed restructuring does not provide for any recovery to holders of Cineworld’s existing equity interests.
Cineworld Group also said on Monday that following an application to the UK’s Financial Conduct Authority, the listing of its shares is expected to be suspended shortly following any decision by the Board to make an application to appoint administrators, which is currently expected to took place in July. . Cineworld further said it expects to cancel its London listing and share trading at 8.00am on the business day following the current appointment of administrators.
Once administrators have been appointed, they will take steps whereby substantially all of the assets of Cineworld Group plc will be transferred to its wholly owned subsidiary, Crown UK Holdco Limited. A newly incorporated company to be controlled by the group’s lenders will become the sole owner of Crown, with Cineworld Group plc no longer having an interest in Crown or the rest of the group. Although the restructuring plan aims to allow the group’s business to emerge from the Chapter 11 cases as a going concern, it will not achieve the rescue of Cineworld Group plc itself.
Cineworld continues to operate its global business and cinemas as usual and this will not be affected by the entry into administration of Cineworld Group plc. The group and its brands – including Regal, Cinema City, Picturehouse and Planet – are continuing to welcome customers and the terms of all existing membership programs continue to be honored, including Regal Unlimited and Regal Crown Club in the US and Cineworld Unlimited in the UK . .
As Deadline reported earlier this month, Cineworld executives, led by CEO Mooky Greidinger, have agreed to a payout in the $30 million range if they leave the company as it prepares to emerge from Chapter 11.