Bankrupt cinema chain Cineworld is to be taken over by its creditors, as part of a new deal to restructure its multi-billion-dollar debts and keep the company alive.
The deal includes a $1.46 billion loan facility, plus a new share offering of $800 million, which will give creditors a 100% stake in the company.
Cineworld says this will cut its debts by $4.53 billion, allowing it to stay in business.
The company filed for bankruptcy protection in September 2022 after the Covid-19 pandemic left its venues closed for much of 2020 and 2021, and the impact of the pandemic slowed the release calendar for blockbusters after reopening.
It said it was looking to sell itself at the start of this year and rival Vue reportedly made a bid for its assets.
However, having agreed this new deal, it now says it will no longer consider a sale for its US, UK and Ireland businesses, though it will keep its options open for its operations elsewhere.
“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,” CEO Mooky Greidinger said.
Greidinger added that the business was poised for recovery this year, thanks in part to new blockbusters such as John Wick Chapter 4.
“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 restructuring deal must still be voted on by the creditors and approved by a Texas bankruptcy court.
Cineworld’s creditors include Blackstone, Invesco and Sixth Street Partners.
As previously announced last month, Cineworld expects to exit bankruptcy protection proceedings in the first half of this year, though it said a potential sale of its rest-of-world business could delay this.
