Regal Cinemas Owner Cineworld Formally Files Bankruptcy Reorganization Plan
Regal Cinemas’ debt-ridden parent company Cineworld formally filed its reorganization plan in Texas bankruptcy court on Tuesday.
The filing makes official a deal described last week that will wipe out the U.K.-based company’s shareholders, cut its debt by about $4.53 billion and raise about $2.26 billion to help the chain emerge from bankruptcy.
Cineworld said in a statement it still expects to emerge from Chapter 11 protection by the end of June and in the meantime it’s “business and usual” for the world’s second-largest cinema chain, though its London-listed stock cratered on the news.
“During the restructuring process, Cineworld continues to operate its global business and cinemas as usual without interruption,” the statement said. “Cineworld and its brands around the world – including Regal, Cinema City, Picture House and Planet – are continuing to welcome customers to cinemas as usual.”
All customer membership programs, including Regal Unlimited and Regal Crown Club in the United States and Cineworld Unlimited in the UK, remain in force, the company said.
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Cineworld Group PLC filed for bankruptcy protection in the U.S. in September in the United States Bankruptcy Court for the Southern District of Texas as it struggled to rebuild its audiences after the pandemic changed most moviegoers’ habits.
A limited film slate last summer failed to lift box office receipts, delaying the movie theater industry’s recovery across the board. With its debt topping $8.8 billion, including lease liabilities, the slow return of audiences forced Cineworld to seek bankruptcy protection.
The reorganization plan for the chain, which operates about 505 theaters in the U.S. alone, must be approved by the court before it can proceed. One notable provision of the plan was that it enabled Cineworld to drop a proposal to sell its businesses in the U.S., U.K. and Ireland.
It may still consider selling assets in the rest of the world, but any sale could delay the company’s emergence from bankruptcy to the second half of the year, it said in the filing.
The arrangement relies on several lenders that already control about 83% of Cineworld’s debt due in 2025 and 2026, along with its revolving credit facility due this year, restructuring the loans to shave about half of the company’s debt, mainly through the companies receiving equity in the reorganized company in return. It also raises $800 million through a new equity offering to the legacy lenders and provides $1.46 billion in new debt financing when the company and its various subsidiaries emerges from Chapter 11.
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