Cineworld is planning to raise $2.26billion (£1.8bn) in new funding to stave off bankruptcy. The cinema chain said raising the money would allow it to exit bankruptcy and allow it to cancel the sale of its UK, Irish and US business.
The struggling company filed for bankruptcy last year putting the future of its 750 sites at risk. But now it plans to restructure its $5bn debt and come out of Chapter 11 bankruptcy.
The financial restructuring will see lenders provide $1.46bn (£1.2bn) in new credit to Cineworld. Meanwhile, while $800m (£651m) of equity will be issued to the lenders.
Mooky Greidinger, chief executive of Cineworld, said: “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. With a growing slate of blockbusters and audiences returning to cinemas in increasing numbers, Cineworld is poised to continue offering moviegoers the most immersive cinema experiences and maintain its position as the ‘best place to watch a movie’.”
The company, which also owns the Picturehouse chain in the UK, had previously attempted to find a buyer in the UK. However, it had struggled to find an acceptable offer and has now cancelled its sale plans in the US, UK and Ireland. It still plans to auction off its operation in other countries.
Cineworld cinemas will remain open during the restructuring process. The company's shares plummeted over the past five years and it was hit hard by the pandemic, which forced it to close its sites.
