Cineworld, which has a prominent Nottingham city centre outlet, has issued an update on its future. The debt-ridden cinema chain has halted the sale of its UK and US operations amid debt restructuring. The firm has said it will raise 2.26 billion US dollars (£1.8 billion) in new funding as part of a plan to exit bankruptcy and terminate a planned sale of its US, UK and Irish businesses.
Cineworld has a Nottingham outlet in The Cornerhouse leisure complex in the city, a location formerly the site of Nottingham Evening Post during its T Bailey Forman and Northcliffe days. The troubled cinema chain runs around 750 sites globally with around 130 of those in the UK. However, it filed for bankruptcy protection in the US last year.
It has now said it will restructure its roughly five billion dollar debt pile in order to emerge from the Chapter 11 bankruptcy during the first half of 2023, according to PA news agency. The financial restructuring will involve lenders providing around 1.46 billion dollars (£1.2 billion) in new credit, as well as 800 million dollars (£651 million) of equity to the lenders.
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Cineworld first announced that it had filed for bankruptcy in America due to issues including declining audience numbers after the coronavirus pandemic. Earlier this year, the firm, which also owns the Picturehouse chain in the UK, launched a process to find a potential buyer. However, after struggling to find an acceptable offer, it said on Monday it will now halt the potential sale efforts for the businesses in the UK, US and Ireland. It will however continue with an auction for its operations outside of these countries.
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’.”
Cineworld’s shares have plunged almost 99% over the past five years, as it was hit particularly hard by the pandemic, which led to the enforced closure of its cinema sites. The business has posted significant losses since and has also come under pressure from growth in streaming services.
The group said it will continue to trade as “business as usual” throughout the financial restructuring process.
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