(BFM Bourse) – The cinema operator announced on Tuesday that this plan had been approved by its creditors. Collapsed under a debt of nearly 9 billion dollars, the company hopes via this heavy restructuring to soon emerge from the American bankruptcy regime.
New big warning shot for Cineworld. The bankrupt British cinema group lost more than 40% on the London Stock Exchange on Tuesday, after announcing the support of its creditors for a recovery plan which will result in heavy losses for its shareholders.
Cineworld “filed a reorganization plan today (Tuesday)” with the American courts, after having obtained the support of a majority of creditors who were to be consulted in this context, the group announced in a press release.
Cineworld had detailed in early April this program which will allow it to raise 2.26 billion dollars, reduce its debt by approximately 4.53 billion dollars and emerge from bankruptcy proceedings in the United States.
But it “provides no recovery” for current shareholders, he repeated on Tuesday.
Dip in the London Stock Exchange
The group lost 43% to 1 penny on Tuesday shortly before 2 p.m., and the title collapsed by more than 95% in one year.
Cineworld, weighed down by 8.8 billion dollars in debt, according to figures stopped at the end of June 2022, hopes to emerge from bankruptcy proceedings in the United States “during the first half”.
The company, which filed for bankruptcy in early September across the Channel, struggled to bounce back after the Covid-19 pandemic and the long hall closures.
Since then, the group has been in discussions with its main stakeholders to put in place a reorganization plan, but has also carried out a process to sell the group at the same time.
Cineworld indicated at the beginning of April that it would finally give up selling its activities in the United States, the United Kingdom and Ireland, in the absence of an offer “significantly exceeding” the value of the restructuring plan, but said it remained open to selling its business to the rest of the world.
A mountain of debt
The group has ensured that its activities will continue without interruption during its reorganization thanks in particular to the liquidities made available by its creditors.
It manages more than 9,000 screens at 751 sites in 10 countries, notably under the Cineworld and Picturehouse brands in the United Kingdom and Ireland, and Regal Cinemas in the United States.
In addition to the devastating impact of the pandemic, it suffered from a frenzy of acquisitions which led it to accumulate mountains of debt, in particular to pay for the purchase of the American chain Regal.
(With AFP)
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