Shares in Cineworld plunged more than 30% Monday to their lowest level since late August, after the owner of Regal Cinemas said it was terminating efforts to sell its US, UK and Ireland businesses.
The world’s second-largest movie theater chain also announced a debt restructuring plan with lenders to help it exit bankruptcy. The deal does not provide for any recovery of funds for shareholders, the company said in a statement.
“This agreement with our lenders represents a ‘vote of confidence’ in our business and significantly advances Cineworld towards achieving its long-term strategy in a changing entertainment environment,” said CEO Mooky Greidinger.
Under the proposed debt restructuring, lenders will reduce the company’s debt pile by $4.5 billion and receive equity in the reorganized group; provide $1.46 billion in new debt; and backstop a $800 million share issue.
Cineworld — which, like many cinema operators, was hit hard by the pandemic — filed for Chapter 11 bankruptcy protection last year. In January, the company announced it was closing 39 more movie theaters in the United States. Around 500 remain across the country.
— This is a developing story and will be updated.
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