Feb 2, 2022
Cineworld debt pile set to save cinema operator from bankruptcy
Cineworld is expected to skirt bankruptcy for the second time in two years, say lenders, despite the UK cinema group facing an almost $1bn payout that exceeds its market value for pulling out of a deal to buy Canadian rival Cineplex. The world's second largest cinema operator has appealed the court awarded damages, but investors in Cineworld's debt expect the two companies to strike a deal for a significantly lower amount even if unsuccessful. Due to the way that the deal was structured, Cineworld could leverage its already high debt load to push Cineplex into accepting a lower payout. As the deal fell apart, the legal entity was left as "An empty box" with no assets, according to the lender, so Cineplex's claim falls to the entity's holding company, Cineworld Group PLC. Partly due to lockdown closures pushing Cineworld to raise emergency financing, and in part due to its existing debt load, the company is already on the hook for billions of dollars in loans to asset managers including Eaton Vance and Credit Suisse Asset Management. In order to boost its cash position, Cineworld said on Tuesday it had entered into negotiations to delay payment of a separate $170mn settlement owed to shareholders in Regal, the US cinema network it bought in 2017.
Related companies
Make a complaint about Cineworld by viewing their customer service contacts.
