Cineworld stock goes up as the bankrupt chain gets access to $ 785 million in funding

Cineworld stock surged on Friday after a U.S. bankruptcy judge granted Regal Cinemas’ parent company Cineworld immediate access to approximately $ 785 million in funding, providing enough liquidity for the major theater chain to meet current obligations. , including suppliers, suppliers and employees. Salaries and benefits.

Shares traded on the London Stock Exchange rose 11% on the news. They have some support, but they are still 4% more.

The remaining $ 1.9 billion in DIP, or debtor facilities in possession, will be made available with final court approval.

The decision provides much-needed funds for the company, which was in dire straits with only $ 4 million in cash on hand. The agreement and approval of Judge Marvin Isgur came around midnight yesterday, after a hearing that began in the morning and lasted all day. The judge noted at the end of the hearing that the DIP deal would keep Cineworld going. Without her, “this business would be closed”.

“Today’s approval of our ‘day one’ distress call is a positive step for the group and our restructuring efforts,” said CEO Mookie Greidinger. “As we position Cineworld for long-term growth, through this Chapter 11 process and beyond, we remain steadfast in our commitment to providing our guests with the most memorable cinematic experiences and maintaining long-term relationships with our customers. Business partners.”

Cineworld, with 747 screens and 9,139 screens worldwide, filed for Chapter 11 in the Southern District of Texas on Wednesday, announcing the so-called balance.

The debtor’s initial financing proposal has been amended, with $ 1 billion earmarked to refinance advance loans from the same group of debtors, now placed on escrow pending the expiry of the appeal period.

Cineworld, burdened by debt from the Regal acquisition in 2018, was hit by the closure of Covid-19 theaters, low attendance and a whimsical studio release schedule. Canadian Cineplex has filed an appeal against a $ 1.24 billion sentence, with a hearing set for October. The influx of adopters earlier this year was promising, but the tents dried up at the end of the summer and the chain entered Chapter 11.