Cineworld’s Chapter 11 bankruptcy woes may be at an end sooner than anyone was expecting, with a new projected dateline of the middle of 2023. Despite this more positive news, the possibility of a sale for either the group or a portion of its assets are still on the table. Entertainment attorney with Blkae & Wang P.A, Brandon Blake, unpacks what we know to date.

European Exit

The owners of the Regal theater group in the US, Cineworld is also the world’s second-largest exhibition chain. With their recently revealed reorganization plan now formally presented to the courts, an emergence from their current Chapter 11 bankruptcy proceedings is looking likelier than ever. The only potential delay? Ongoing sales transactions for the group, which could see proceedings stretch past that mid-year deadline.

Are they still interested in a buyout? Unless a bidder comes to the table with a bid ‘significantly in excess of the value established under the proposed restructuring,’ it seems not. For their UK, Irish, and American operations, at least. Regarding the rest of the world? It’s a maybe.

Court Approval Awaited

Under the terms of the new agreement, the company’s debt will be reduced by $4.53B, achieved in the most part by equity deals for lenders willing to release their claims. Of these lenders, those who have already agreed to the restructuring process account for almost 85% of the company’s term loans, which should hold a lot of power with the courts. Interestingly, the terms of the proposed reorganization offers no recovery/relief options for their stockholders. This is in marked contrast to AMC, which we have recently seen offer a full restructuring of their stock options in order to stave off finding themselves in the same boat as Cineworld is currently.

For now, it will remain business as usual for Cineworld globally, including the Picture House, Regal, Planet, and Cinema City offshoot chains. One intriguing question we have not seen answered to date is what the new restructuring deal will mean for those Regal cinemas which were supposed to be shuttered in increments through the start of the year. As we’ve seen, however, many of the locations selected for closure are, indeed, continuing to accept new films and sell tickets both. We can only assume that in many of these cases, re-brokered deals with the landlords have offered enough relief for trade to continue. After all, there’s not much else you can do with a shuttered cinema other than market it as such, so it’s easy to see why retaining a long-term tennant would be in their interests.

While there’s still a long, hard road ahead, and it will be bitterly dependent on an increased slate allowing for a full box office recovery to happen in the next 2 years, it’s at least a lot of good news for the exhibition industry as a whole, as well as Cineworld itself. The less disruptions within the industry, particularly from the frantic selling off of assets for such a large chain, the better for everyone.

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