Despite the overall gains made in theatrical exhibition this year, theater giant Cineworld Group has been struggling. With a bankruptcy declaration still not off the cards, we see it apply for financing through the US Bankruptcy court this week, a move that granted it a lifeline of ‘up to’ $785M. Brandon Blake, our expert entertainment attorney at Blake & Wang P.A, has the facts.
Expected to Provide Sufficient Liquidity
Cineworld, responsible for the Regal Theatrical Chain in the US, as well as some subsidiaries, was forced to file Chapter 11 bankruptcy in the US Bankruptcy Court for the Southern District of Texas last week. The amount granted is ‘first day’’ relief related to those proceedings, with which Cineworld Group expects to meet its ongoing obligations with existing liquidity. It is part of a (roughly) $1.94 billion debtor-in-possession (DIP) financing facility they will be leveraging for this end. The remainder of the amount will be available to them subject to court approval.
Suppliers and Vendors to be paid in Full
This means that vendors and suppliers of the chain should be paid in full for their services and goods provided during the Chapter 11 proceedings. Employees will also receive their usual benefits and wages with no anticipated interruption. Overall, it’s a positive step for the group to restructure for the changed exhibition market. Cineworld Group is currently the second-largest exhibition firm in the world, with just short of 10,000 screens in 10 countries and 747 sites.
While one chain’s experience does not an industry make, this should also quiet some of the wider worries about the poorer Fall performance at the Box Office. Cineworld have reiterated their dedication to providing a solid theater-going experience for patrons. We will, of course, be watching out for further developments in this matter.
