Cineworld To File For Administration In UK As Part Of Restructuring
26.06.2023 - 08:37
/ deadline.com
Cineworld said on Monday that as part of its proposed restructuring following Chapter 11, it expects to file for administration of its listed entity Cineworld plc in the UK but that its operating companies will continue business as usual without interruption.
Administration in the UK is an insolvency process, similar to a bankruptcy process. The world’s second biggest cinema chain, which owns Regal in the U.S., filed for bankruptcy protection in the U.S. 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 U.S.
The UK administration application would only apply to Cineworld Group plc itself (as the listed parent company of the group) and not to any of the operating companies or subsidiaries under it. Any administration order would not affect the status or rights of any of the group’s employees and operations will be unaffected 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 involve the release of approximately $4.53 billion of the group’s funded indebtedness, the execution of a rights offering to raise gross proceeds of $800 million and the provision of $1.46 billion in new debt financing.
Given the level of existing debt that is expected to be released under the plan, the proposed restructuring does not provide for any recovery for holders of Cineworld’s existing equity interests.
Cineworld Group also said Monday that after an application to the UK’s Financial Conduct Authority, it is expected that the listing of its shares will be suspended shortly following
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