Cineworld Group PLC (LSE: CINE), a prominent cinema chain, has announced its plan to exit Chapter 11 bankruptcy protection by July. The restructuring strategy set to be implemented will unfortunately leave equity shareholders with nothing.
The company, which holds the position as the world’s second-largest cinema operator, was compelled to seek bankruptcy protection in the US following a lacklustre recovery post-pandemic and escalating inflationary pressures.
Cineworld affirmed that its subsidiaries, which include Regal, Picturehouse, and Cinema City, will continue operations as normal. All membership programs are to be maintained and honoured.
The UK-based company’s lenders gave their consent to a restructuring support agreement as well as a backstop commitment agreement (BCA), Cineworld announced, after filing these resolutions in the US at the beginning of April.
In May, US courts approved the BCA terms, enabling Cineworld to generate funds for an exit facility while requiring the group to cover any associated fees.
The cinema operator acknowledged this approval as another encouraging advancement for the Group Chapter 11 Companies towards the execution of the proposed restructuring.
This update follows the revelation just over a month ago that Cineworld abandoned its search for a potential buyer. All bids presented were deemed too low by its lenders.
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