A Cineworld location near Manchester, Britain, on Oct. 4, 2020.Phil Noble/Reuters
Cineworld Group PLC expects to emerge from Chapter 11 bankruptcy protection in July, the British cinema-chain operator said on Thursday, adding that its proposed debt restructuring has the backing of most of its lenders.
The world’s second-largest movie-theatre chain operator after AMC Entertainment filed for U.S. bankruptcy protection in September, hoping to restructure its massive debt.
Cineworld, owner of Regal in the United States and Picturehouse, Planet and Cinema City across Europe, had scrapped plans to sell some or all its businesses after failing to find a buyer.
It instead opted for a restructuring plan that will wipe out its shareholders.
Shares in the company, which will likely be delisted after the bankruptcy process, have lost more than 99 per cent of their value since hitting a peak of 310 pence six years ago. They were trading at 1 pence on Thursday.
After years of expansion through acquisitions that also loaded its balance sheet with debt, Cineworld hit a major snag when the pandemic shut its cinemas and halted releases of blockbluster movies.
In addition, its abandoned plan to take over rival Cineplex Inc. CGX-T has triggered a $1.23-billion damages claim for walking away from the deal.
Earlier this month, Cineworld received U.S. court approval to raise US$2.26-billion as part of its bid to exit bankruptcy, after reaching a settlement with a minority faction of lenders that had opposed parts of the exit financing.
The British company said the restructuring plan received the support of lenders holding about 99 per cent of its legacy debt facilities and at least 69 per cent of its outstanding indebtedness under the debtor-in-possession facility.
It is scheduled to seek final court approval of its bankruptcy restructuring on June 12.