Regal Parent Cineworld has draft plan with backers to restructure based on Chapter 11; Continue to accept third-party offers

The lawyer for bankrupt Cineworld said today that Regal’s parent company has received an outline of a restructuring plan from lenders, a blueprint that will get it out of bankruptcy, although it is also working on a possible sale of assets.

During a hearing in bankruptcy court in the Southern District of Texas, Cineworld attorney Joshua Sussberg said creditors received a term sheet over the weekend for a debt-for-equity swap and a “significant” offer of rights to the company. buy in the Funds would have filed in in the future. He did not provide details on the plan, which has not yet included any concrete financing commitments. A group of 35 funds collectively owes Cineworld $6 billion.

Meanwhile, the company is undergoing a sale process, and Sussberg said he has signed various non-disclosure agreements with interested parties, including financial and strategic buyers “of all shapes and sizes and all types of offers.” Non-binding bids are scheduled for February 16. “Our lenders are effectively bidders, and if they become a third-party stalker, we would welcome that.”

A resurgent box office has stepped up Avatar: the way of water helped bolster the company’s liquidity, which reached $185 million at the end of January, he noted.

Cineworld filed for bankruptcy last fall after a long slump.

“It did not escape the company’s notice that this group of borrowers stepped up several times to help in times of need. It was because of Covid. And there were several financings. This would be another example of the lenders financing the company and financing its recovery. And it’s not lost on us that people have lost money. And it is clear that in situations like this the finger is pointed,” he said.

“I won’t go into detail, but there are stories about our management team that are not true,” Sussberg said. “Their knowledge is deep and they are committed to facilitating this reorganization by doing what is necessary and necessary.” Cineworld is led by Mooky Greidinger and was founded a century ago by his grandfather.

Mark Messersmith, who spoke on behalf of the Lenders Group, said of those comments later at the hearing: “Obviously, leadership of the reorganized entity will be very, very important to us in a debt-for-equity transaction. When the borrowers become owners of the company, which is our base scenario, we expect the board of the restructured company to review and elect a senior management team. If this is the case, there will necessarily be a transition and we expect to work with the Debtor and the existing management team on the terms of that transition as appropriate.”

Both parties hope to present a detailed restructuring plan by the end of February.

As part of Chapter 11, Cineworld has 150 “lease adjustments” and 77 leases pending rejection if the circuit can’t reach an agreement with the landlords, Sussman said. It also plans to end its long-term deal with in-cinema advertising partner National Cinemamedia and strike a deal with another provider.