Cineworld wants to leave bankruptcy in July, creditors accept restructuring

Cineworld wants to leave bankruptcy in July, creditors accept restructuring

Cineworld wants to leave bankruptcy in July, creditors accept restructuring

Cinema the Cineworld chain in London in a picture taken on October 5, 2020.

London – British cinema operator Cineworld wants to leave the court protection regime from creditors in July. The firm said in an updated notice to regulators today that its restructuring plan had been supported by a majority of creditors. Creditor protection does not apply to the company's business activities in the Czech Republic, Slovakia, Poland, Hungary, Bulgaria, Romania and Israel.

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The world's second-largest movie theater chain operator, after US company AMC Entertainment, filed for bankruptcy protection in the United States last September in hopes of restructuring its massive debts. Cineworld owns Regal cinemas in the United States, Picturehouse, Planet and Cinema City cinemas in Europe. In April, the company canceled plans to sell some of its businesses because it was unable to find a buyer. Instead, it opted for a restructuring plan that would wipe out common shareholders.

Shares in the company, which is likely to be delisted after exiting bankruptcy, have lost more than 99 percent of their value from a high of 310 pence apiece six years ago. They are now practically worthless, trading for one penny on the London Stock Exchange this morning.

After years of expansion through acquisitions that left the company heavily in debt, the business ran into serious trouble at the start of the covid-19 pandemic. At that time, it was necessary to close the cinemas due to the decision of the authorities. In addition, Cineworld had to pay C$1.23 billion (about 20 billion CZK) to withdraw from a plan to take over rival cinema operator Cineplex, Reuters reported.

Earlier this month, Cineworld received permission from a US court to secure $2.26 billion as part of the bankruptcy filing. The company has reached an agreement with a minority faction of creditors who opposed part of the financing of the bailout plan.

Cineworld said the restructuring plan has won support from creditors who hold about 99 percent of its senior debt instruments. and at least 69 percent of the outstanding debt under the borrower's loan. On June 12, the company plans to ask the court for final approval of the bankruptcy restructuring.

Cineworld operates in ten countries and employs around 28,000 people. According to its website, its part Cinema City in the Czech Republic operates 12 multiplexes and one megaplex in seven cities, namely in Prague, Brno, Liberec, Pardubice, Pilsen, Ústí nad Labem and Ostrava.