Cineworld Receives $785 Million From Bankruptcy Court – Deadline

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Cineworld shares rose on Friday after a U.S. bankruptcy court judge granted Cineworld, the parent company of Regal Cinemas, immediate access to approximately $785 million from a financing facility, providing ample liquidity to the giant cinema chain to meet ongoing obligations, including to vendors, suppliers and employees. wages and benefits.

The shares, traded on the London Stock Exchange, jumped 11% on the news. They have fallen back a bit, but are still around 4% higher.

The remainder of the total $1.9 billion DIP, or debtor-in-possession facility, will become available following final court approval.

The decision provides needed funds for the company, which was in dire straits with just $4 million in cash. The agreement and approval by Judge Marvin Isgur came around midnight yesterday after a hearing that started in the morning and stretched throughout the day. The judge noted at the end of the hearing that the DIP deal would keep Cineworld in business. Without it, “this business would have been closed”.

“Today’s approval of our ‘day one’ relief request is a positive step forward for the Group and our restructuring efforts,” said CEO Mooky Greidinger. “As we position Cineworld for long-term growth, through this Chapter 11 process and beyond, we remain steadfast in our commitment to providing our customers with the most memorable cinematic experiences and maintaining our long-standing relationships. with our business partners.

Cineworld, with 747 theaters and 9,139 screens worldwide, filed for Chapter 11 in the Southern District of Texas on Wednesday and announced a so-called DIP, or debtor-in-possession, loan from a consortium of lenders to continue to operate while it cleans up its balance sheet.

An initial creditor funding proposal was adjusted, with $1 billion of the total intended to refinance pre-petition loans from the same group of creditors, now placed in an escrow account pending the expiry of a challenge period.

Cineworld, which racked up debt when it acquired Regal in 2018, has been crippled by Covid theater closures, low attendance and a fickle studio release schedule. A $1.24 billion judgment against him by Cineplex of Canada is on appeal, with a hearing scheduled for October. A surge in admissions at the start of this year was promising, but tents dried up at the end of the summer, tipping the channel to Chapter 11.

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