Cineworld shareholders to be wiped out under bankruptcy plan
Existing shareholders in Cineworld will be wiped out under the embattled cinema operator’s latest proposals to reorganise the business and exit bankruptcy.
The London-listed chain, which was forced to file for bankruptcy protection in the US last autumn, said it had filed a reorganisation plan with an American bankruptcy court.
The plans detail how the business intends to restructure its debt pile – totalling about $5bn (£4bn) – so that it can stick to its timetable of exiting Chapter 11 bankruptcy protection during the first half of this year.
They require approval from the bankruptcy court, which considers how companies are restructured as they exit Chapter 11, as well as approval from certain creditors.
Cineworld said its plan was supported by lenders, which hold and control about 83% of its loans due to be repaid in 2025 and 2026 and of its revolving credit facility, which is due to be repaid this year. They said it was also backed by those holding and controlling about 69% of its outstanding debts.
However, the company added that its high levels of debt and the level of existing debt due to be released under the reorganisation plan meant that “the proposed restructuring does not provide for any recovery for holders of Cineworld’s existing equity interests”.
Cineworld said it wants to exit bankruptcy protection as soon as possible, but this could be delayed beyond the first half of the year, such as by the sale of any part of the business.
The cinema chain, which runs about 750 sites globally, announced earlier this month that it planned to raise $2.3bn in new funding. It also said it was halting attempts to try to sell its US, UK and Irish businesses after itfailed to receive any acceptable offers.
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