Ailing cinema chain Cineworld has introduced a debt restructuring bundle with its largest lenders that may assist deliver it out of Chapter 11 chapter proceedings.
The corporate — whose manufacturers embrace Regal, Cinema Metropolis, Picturehouse and Planet — entered Chapter 11 in September, weighed down by $8.8bn in debt and lease liabilities.
Below the proposal, the lenders will scale back the debt pile by $4.5bn and obtain fairness within the reorganised group; present new debt of $1.5bn; and backstop an $800mn fairness rights challenge. The deal “doesn’t present for any restoration for holders of Cineworld’s current fairness pursuits”, Cineworld mentioned in a press release on Monday.
Cineworld shares dropped greater than 23 per cent on the information.
Mooky Greidinger, chief govt of Cineworld, mentioned: “This settlement with our lenders represents a ‘vote-of-confidence’ in our enterprise and considerably advances Cineworld in direction of reaching its long-term technique in a altering leisure setting.”
Final week, the FT reported that the chain’s lenders have been planning to oust Greidinger in a administration shake-up.