The Cineworld Group plc (LON: CINE) share price plunged 28.9% after announcing the approval of its bankruptcy exit plan by the US Bankruptcy Court for the Southern District of Texas, Houston Division after filing the third amended joint Chapter 11 plan of reorganisation.
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The amended plan was approved at a hearing held yesterday. It paved the way for the Group Chapter 11 Companies to implement the restructuring transactions contemplated by the Plan and to successfully emerge from their Chapter 11 cases after satisfying certain conditions.
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The new plan of reorganisation involves the release of about $4.53 billion of the Group’s funded indebtedness, the execution of a fully backstopped rights offering to raise gross proceeds of $800 million and the provision of $1.46 billion in new debt financing.
Cineworld also noted that the reorganisation plan would only affect Cineworld Group Plc as other operating subsidiaries would continue operating unaffected. The group will be subject to an order of the court in England and enter into administration shortly before the Group Chapter 11 Companies emerge from their Chapter 11 cases.
The plan requires the formation of a new company (NewCo) that would be the sole owner of the group once it emerges from bankruptcy. The plan also requires the appointment of new directors for the NewCo Board. The new board will be led by Eric Foss as Chairman.
Mr Foss has served as Chairman and CEO of two Fortune 200 companies and has extensive global business experience in the food, beverage and service industries.
Mooky Greidinger, Cineworld’s CEO, said: “The confirmation of our plan of reorganisation is a significant milestone as Cineworld moves towards emerging from this process in a strong financial position and with a more resilient capital structure. I want to thank our incredible employees as well as our customers, vendors, lenders and other stakeholders who supported us throughout this process. Cineworld remains focused on refining and growing our global business and cinemas for our guests around the world and delivering the most immersive and cutting-edge cinema experiences that make us the ‘Best Place to Watch a Movie.”
*This is not investment advice.
Cineworld share price.
The Cineworld share price plunged 28.85% to trade at 0.37p, from Wednesday’s closing price of 0.52p.
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