Cineworld shares tank after Regal Cinemas owner ditches plans to sell US, UK businesses

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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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