Cineworld will not sell assets separately, says no talks with AMC

Exhibitions giant Cineworld, which filed for Chapter 11 bankruptcy in the US last September, said it would not sell any of its assets individually and clarified that neither it nor its advisers were involved in talks with AMC to sell its assets. – cinemas for sale. It comes about two weeks after AMC announced it was in discussions with financiers about the possible acquisition of theaters from its competitor’s portfolio.

In an SEC filing in late December, AMC said it was discussing talks with Cineworld backers related to the Chapter 11 bankruptcy proceedings and an unspecified number of theaters in the US and Europe. It was then also said that the “negotiations are not progressing”. Cineworld announced today that neither the ad hoc group of lenders under the Group’s 2018 credit facility nor their advisers were involved in discussions with AMC.

Cineworld, which owns Regal in the US and is facing less than $5.8 billion in debt due to the impact of the Covid crisis, also noted today that discussions are underway with its key stakeholders to finalize a proposed reorganization to create value to maximize.

The world’s second largest film circuit will carry out a “marketing process” to seek a “value maximizing transaction” for the group’s assets, targeting the group as a whole. Contact with potential interested parties will be established later this month. This is common in Chapter 11 litigation because lenders want to see if there are buyers interested in acquiring the entire package. If there is no buyer at the end of the chapter, the borrowers will likely become owners. It is expected that each sale transaction will proceed in parallel with the confirmation of the proposed reorganization plan.

The company said it has not, and does not intend to, initiate a separate marketing process for the sale of its assets on an individual basis, nor would a sale of the group as a whole include the sale of Cineworld itself does not involve, and it will not be subject to, the UK Takeover Code.

As previously announced, Cineworld recalls that any reorganization or sale transaction agreed with stakeholders is likely to result in a very significant dilution of existing equity interests in the company and there is no guarantee of recovery for existing equity interest holders.