Cineworld Group plc (LON: CINE) is planning to file for administration in the United Kingdom as part of a proposed restructuring plan.
The cinema chain confirmed on Monday that its shares will also be delisted from the London Stock Exchange in July.
This stock market news comes less than a year after Cineworld filed for bankruptcy protection in the US. At that time, it had nearly $9.0 billion of net debt on its balance sheet.
The proposed restructuring will release approximately $4.53 billion of debt and includes a rights issue to raise approximately $800 million in gross proceeds. However, it does not provide any recovery for existing shareholders.
The pandemic-hit cinema chain is now trading at just 56 pence per share. Cineworld expects to exit Chapter 11 proceedings in July
Once appointed, administrators will transfer all of Cineworld’s assets to its wholly-owned subsidiary, Crown UK Holdco Limited. The company’s update today also states:
A newly incorporated entity to be controlled by the Group’s lenders will become the sole shareholder of Crown, with Cineworld Group having no remaining direct or indirect interest in Crown or the rest of the group.
Cineworld still expects to emerge from Chapter 11 bankruptcy protection next month. The cinemas will continue to operate during the restructuring.
Earlier this month, lenders agreed to collectively pay up to $35 million to executives of the cinema company to ease their departure after it exits Chapter 11 proceedings in July. Cineworld operates over 700 theatres worldwide.
