Cineworld Group, a movie theatre chain, announced Monday a bankruptcy settlement. This allowed the company to borrow $150 million more and repay $1 billion in debts.
After Cineworld agreed to pay at minimum $20 million in rent, both junior creditors and landlords dropped their objection to the billion-dollar debt repayment. Cineworld in Britain filed in Texas for bankruptcy protection on September 3rd with less than $4million in cash. It previously stated that it did not intend to make rent payments after September.
Cineworld, the second-largest operator of cinema chains in the world, agreed to look into a possible sale and invite creditor input.
Cineworld Shares Surge After Bankruptcy Settlement #CINE announced a bankruptcy settlement with its landlords and lenders, clearing the way for the company to borrow an additional $150 million and make a $1 billion debt repayment. pic.twitter.com/56egkRjY1e
— Share_Talk ™ (@Share_Talk) November 1, 2022
Houston U.S. Bankruptcy Judge Marvin Isgur said that the agreement was “pretty incredible” given the opposition of many landlords and creditors to Cineworld’s Chapter 11 bankruptcy financing.
Cineworld attorney Christopher Marcus stated in court that 15 creditors had lodged objections to the loan. The company then resolved more than a dozen other objections.
Robert LeHane, an attorney whose landlord clients own leases in 120 locations, stated that although the order isn’t perfect, it is very commercially acceptable.
The judge had previously approved part of Cineworld’s bankruptcy financing. This allowed Cineworld to borrow $785m at the beginning of its bankruptcy case while deferring judgment regarding the $1 billion debt repayment.
Cineworld, the owner of Regal Cinemas, has more than 9,000 screens in 10 countries and approximately 28,000 employees. It filed for bankruptcy citing difficult financial conditions and high debt from Regal’s $3.6 billion acquisition.
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