Broughton: Cineworld UK to file for administration in bid to secure future
Cineworld, the owner of Broughton Retail Park’s multi-screen cinema has announced its intent to file for administration as it charts a path to financial recovery.
The company emphasised that the decision won’t affect the British activities of the holding company, and cinemas will continue to stay open, “as usual without interruption.”
In a financial statement this morning Cineworld said cinemas will continue “to welcome customers to cinemas as usual.”
“Any administration order would not affect the status or rights of any of the Group’s employees.”
After disclosing financial issues in April 2023, the company has updated its debt restructuring plan, unveiled to a Texas court on June 25, 2023.
Cineworld, the world’s second-largest movie theatre chain operator, filed for U.S. bankruptcy protection in September, seeking to restructure its staggering debt.
The impact of the COVID-19 pandemic dealt a severe blow to the cinema chain, prompting it to seek drastic financial measures.
Following failed attempts to sell off some or all of its business, Cineworld has chosen a restructuring strategy that will erase existing shareholders’ equity.
This significant decision underlines the depth of Cineworld’s financial crisis and its impact on investors.
The restructuring plan aims to alleviate Cineworld’s financial difficulties and bolster its long-term strategies. Specifically, it involves writing off about £4.53 billion of its debt, raising £615 million through a rights offering, and securing £1.12 billion in new loans.
Upon the appointment of administrators, Cineworld’s assets will move to a new company under the control of the group’s lenders.
This move effectively removes Cineworld Group plc’s interests in its subsidiaries, a move that signals the severity of the company’s financial condition.
Trading of Cineworld shares on the London Stock Exchange is expected to be suspended in the wake of the administrators’ appointment, likely in July 2023.
The shares are set to be completely delisted the following day.
Despite these financial changes, Cineworld remains optimistic about emerging from Chapter 11 bankruptcy protection by July 2023.
The cinema chain had stated in May that most of its lenders back its proposed debt restructuring.
Throughout these changes, Cineworld guarantees the uninterrupted operation of its movie theatres worldwide, ensuring continuity for customers and employees alike.
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