The Cineworld Group plc (LON: CINE) shares were suspended from trading on the London Stock Exchange (LSE) after the company’s board approved the appointment of administrators for the group as the last step before the company and its subsidiaries exited the Chapter 11 bankruptcy process.
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The movie theatre chain expects to exit the Chapter 11 Bankruptcy cases on Monday, 31 July 2023. The company has also applied to the High Court in London for an administration order under the Insolvency Act 1986.
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Still, the company reminded investors that the administration order only applies to Cineworld Group plc, not the operating companies or subsidiaries in the rest of the Group. Hence, any administration order would not affect the status or rights of the Group's employees.
Cineworld reminded inventors that the restructuring, which shall be conducted via the administration process, would transform its balance sheet and provide it with significant additional liquidity to fund its long-term strategy.
The restructuring involves the release of about $4.53 billion in debt owed by the Group and the execution of a rights issue to raise gross proceeds of $800 million. The company will also receive $1.71 billion in new debt financing, including a new revolving debt facility of $250 million recently secured.
Given the amount of debt that Cineworld will be releasing under the restructuring plan, there will be no recovery for Cineworld’s existing shareholders, whose shares will become worthless after the administration.
Cineworld has written to the UK’s Financial Conduct Authority (FCA) requesting the suspension of the trading of its shares from the premium listing segment of the FCA’s official list. Trading in the company’s shares was suspended today at 8.00 a.m. London time.
On Monday, the company expects its shares to be cancelled from trading on the LSE as of 8.00 am. The cancellation of Cineworld’s shares from trading on the LSE will mark the end of the road for the movie theatre chain as a public company.
Cineworld has been on a wild ride since the heady pandemic days of early 2020, and it is a sad day to see the company exit the public markets. However, the company will continue as a private company owned by its lenders instead of ordinary shareholders.
*This is not investment advice.
Cineworld share price.
The Cineworld share price was suspended from trading on the LSE today; hence, there was no movement in its share price.
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