Cineworld Group PLC (LSE:CINE), the cinema chain, has said it will be exiting its Chapter 11 bankruptcy protection in July and the restructuring plans are expected to wipe out any equity shareholders.
The world’s second-largest cinema operator was forced to file for bankruptcy protection in the US after a poor post-pandemic recovery left the company unable to fight off soaring inflationary pressures.
The company said its business will continue as usual for all subsidiaries of the group, including Regal, Picturehouse, and Cinema City, with all membership programmes still being honoured.
Lenders of the UK company agreed to both a restructuring support agreement and a backstop commitment agreement (BCA) after the resolutions were filed in the US at the start of April, Cineworld said in a statement.
In May, the US courts accepted the terms of the BCA, which allows Cineworld to raise funds for an exit facility and requires the group to pay any fees involved with this.
“This order marked another positive step taken by the Group Chapter 11 Companies towards implementation of the Proposed Restructuring,” the cinema operator added.
The news comes just over a month after it was revealed Cineworld was scrapping its search for a new buyer after all offers made to the organisation were too low for its lenders’ liking.
Cineworld shares rallied from opening falls to add 4.7% at 1.13p in early trading on Thursday morning.