Cineworld, Leceister Square

Source: Cineworld

Cineworld, Leceister Square

Cineworld has filed a reorganisation plan that will help it to exit bankruptcy but will largely wipe out existing shareholders.

The beleaguered cinema operator said in a statement this morning to the London Stock Exchange that it had filed the reorganisation plan with a Texas bankruptcy court.

The filing formalises a deal announced last week that includes plans to cut debt by about $4.53bn, principally through lenders receiving equity in the reorganised group in exchange for the release of their claims. It will also raise $2.26bn in new funds.

The restructuring will significantly dilute the holdings of existing shareholders. In its statement, the cinema operator said that the plan “does not provide for any recovery for holders of Cineworld’s existing equity interests.” It added that the plan had the support of the majority of its lenders.

Shares in the world’s second-largest cinema chain operator fell to 1.5 pence today (11 April) and have lost more than 99% of value since it listed in 2007.

Cineworld placed a majority of its business under US Chapter 11 bankruptcy protection in September.

It said today that it expects to emerge from Chapter 11 during the first half of 2023.

Cineworld is the second largest exhibitor in the world, and also operates the Regal, Cinema City, Picturehouse and Planet cinema circuits.

It announced last week that it had dropped plans to sell its businesses in the US, UK and Ireland.