Cineworld drops big sales plan, proposes new debt agreement

April 3 (Reuters) – Cineworld ( CINE.L ) has shelved plans to sell its U.S., British and Irish operations after failing to find a buyer, the cinema chain operator said on Monday, as it proposed a new debt restructuring plan.

The world̵[ads1]7;s second-largest cinema chain operator behind AMC Entertainment ( AMC.N ) placed the majority of its operations under US Chapter 11 bankruptcy protection in September.

Under a new preliminary agreement with lenders, it said it aimed to reduce debt by about $4.53 billion, mainly through creditors getting equity in a reorganized group.

It had net debt of $8.81 billion including lease obligations as of June 2022.

The plan also includes raising $2.26 billion to emerge from bankruptcy this year.

“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 in a statement.

“Cineworld has decided that, absent a cash bid substantially above the value established under the proposed restructuring, the marketing process as it relates to the group’s operations in the US, UK and Ireland will be terminated,” it said in a statement.

The company said it will continue to consider proposals to sell its “Rest of the World” business, which accounted for about 13% of revenue in 2021 and includes operations in Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Israel.

Private equity firm CVC Capital Partners and activist investor Elliott Management last month proposed separate takeover bids for their Eastern European and Israeli businesses, Sky News reported.

Shares in the London-listed company are down more than 99% from a record high in 2017.

On Monday, they fell as much as 38% to 1.8p in early trade.

The company reiterated that shareholders will be wiped out under the restructuring plans.

Reporting by Aby Jose Koilparambil and Yadarisa Shabong in Bengaluru; editing by Louise Heavens and Jason Neely

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