Update on Chapter 11 casesSource: RNS
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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
CINEWORLD GROUP PLC
("Cineworld" or the "Company")
Update on Chapter 11 cases
Chapter 11 cases
On 7 September 2022, Cineworld (together with its subsidiaries, the "Group") announced that it and certain of its subsidiaries had commenced Chapter 11 cases in the United States. In that announcement, Cineworld stated its expectation that any transaction implemented through the Chapter 11 cases would result in very significant dilution of existing equity interests in the Group and that there was no guarantee of any recovery for holders of existing equity interests.
Since then, Cineworld has been in discussions with its key stakeholders with a view to developing as expeditiously as possible a plan of reorganisation (a "Plan") that maximises value for the benefit of moviegoers, the Group and all other stakeholders, taken as a whole, in the long term. As announced on 3 January 2023, in parallel with the discussions regarding a potential Plan, Cineworld has also been running a marketing process in pursuit of a value maximising transaction for the Group's assets (the "Marketing Process").
Further, in connection with the Marketing Process, the Company has now received non-binding proposals from a number of potential transaction counterparties for some or all of the Group's business. None of these proposals involves an all-cash bid for the entire business. The Company is reviewing such proposals in conjunction with its advisers and key stakeholders and, whilst no decision has been made as to whether to pursue a sale transaction, and the terms of any such transaction remain uncertain, based on the proposals received to date, it is not expected that any sale transaction will provide any recovery for the holders of the Company's equity interests. Any sale transaction for the Group as a whole would not include the sale of the equity interests in Cineworld itself and would therefore not be subject to the rules of the Takeover Code.
Discussions between the Company and certain of its stakeholders regarding a potential Plan are progressing. Whilst the discussions suggest that there is a route to the Company emerging from the Chapter 11 cases, in light of the level of existing debt that is expected to be released under any Plan, the Company does not believe that there will be sufficient creditor support for a Plan that contemplates any recovery for equity interests, and it is therefore not expected at this time that any Plan will provide any recovery for holders of Cineworld's existing equity interests.
Based on the current status of these discussions, Cineworld now expects to emerge from the Chapter 11 cases during the first half of 2023. Although any sale transaction resulting from the Marketing Process, among other things, may delay emergence beyond the first half of 2023, the Company remains committed to emerging from the Chapter 11 cases as expeditiously as possible.
Business as usual
As announced on 7 September 2022, during the restructuring process, Cineworld continues to operate its global business and cinemas as usual without interruption. Cineworld and its brands around the world - including Regal, Cinema City, Picture House and Planet - are continuing to welcome customers to cinemas as usual. The Group continues to honour the terms of all existing customer membership programmes, including Regal Unlimited and Regal Crown Club in the United States and Cineworld Unlimited in the UK.
The person responsible for arranging the release of this announcement is Scott Brooker, Company Secretary.
For further information, please contact:
Cineworld Group plc
Manuela Van Dessel
+44 (0) 20 8987 5000
FGS Global (UK)
James Leviton / James Thompson
+44 (0) 20 7251 3801
FGS Global (US)
Kal Goldberg / Lizzie Hyland / Michael Mittelman
+1 (646) 970-4727
Cineworld was founded in 1995 and is now one of the leading cinema groups in Europe. Originally a private company, it re-registered as a public company in May 2006 and listed on the London Stock Exchange plc in May 2007. Cineworld's acquisition of Regal Entertainment Group has created the second largest cinema business in the world (by number of screens). Cineworld currently operates in the United Kingdom, Ireland, Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania, Israel and the United States.
Forward looking statements
This announcement is not intended to and does not constitute and should not be construed as, considered a part of, or relied on in connection with any information or offering memorandum, security purchase agreement, or offer, invitation or recommendation to underwrite, buy, subscribe for, otherwise acquire, or sell any securities or other financial instruments or interests or any other transaction.
This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Group and certain plans and objectives with respect thereto, including with respect to the Group's ordinary shares. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could", or other words of similar meaning. These statements are based on assumptions and assessments made by the Group in light of their experience and their perception of historical trends, current conditions, future developments and other factors the Group believes appropriate. By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward-looking statements in this document could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and you are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this document. The Group does not assume any obligation to update or correct the information contained in this document (whether as a result of new information, future events or otherwise), except as required by applicable law.
There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions (including any potential sale by the Group) and the risks, uncertainties and costs related to the Chapter 11 cases, including, among others, the timing of any emergence from the Chapter 11 cases and the risk that any Plan may not be confirmed or implemented at all.
Nothing in this announcement is intended as a profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings, profit or earnings or profit per share or dividend per share for the Group for the current or future financial years would necessarily match or exceed the historical published earnings, profit or earnings or profit per share or dividend per share for the Group.
PJT Partners LP, Alix Partners LLP, Kirkland & Ellis LLP and Slaughter and May (collectively, the "Advisers") are providing advice to Cineworld (and other members of the Group) and no one else in connection with the matters referred to in this announcement. The Advisers will not regard any other person as their client in connection with such matters, nor will they be responsible to any other person for providing the protections afforded to their clients or for providing advice in relation to such matters.