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Cineworld looks to further delay payments to former Regal shareholders
Global Banking & Finance Review®
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(Reuters) -Cineworld said on Wednesday it had approached former dissenting shareholders of its U.S. division Regal Entertainment to further delay payment obligations, as the British cinema chain operator looks to boost its liquidity.
(Reuters) -Cineworld said on Wednesday it had approached former dissenting shareholders of its U.S. division Regal Entertainment to further delay payment obligations, as the British cinema chain operator looks to boost its liquidity.
The world’s second-largest movie theatre operator last year said it would pay $170 million to Regal shareholders, who were disgruntled with the price of $23 per share they received when the London-listed company took over the U.S. chain in 2017.
It earlier reached a deal in February to delay final payments to the former Regal shareholders to June 30 this year.
Debt-laden Cineworld said lenders of certain debt facilities have given waivers, or promises to waive, any “events of default” in order to help with talks with the former Regal shareholders.
It expects to obtain waivers from the holders of its convertible bonds due 2025 as well.
Cineworld took on a huge debt as part of the $3.6 billion Regal deal. Its net debt stood at $8.9 billion at the end of December.
Refinitiv data showed its credit score had sunk to 1, the lowest on a scale of up to 100, meaning it was highly likely to default in the next year.
The company is also involved in a long-drawn dispute over a botched deal with Canada’s Cineplex, which could result in damages of up to C$1.23 billion ($958.99 million).
($1 = 1.2826 Canadian dollars)
(Reporting by Amna Karimi in Bengaluru; Editing by Rashmi Aich)
Liquidity refers to the availability of liquid assets to a company or individual, which can be quickly converted to cash to meet short-term obligations.
Debt facilities are financial arrangements that allow a borrower to access funds, typically through loans or credit lines, to finance operations or investments.
A waiver in finance is a formal relinquishment of a right or claim, often allowing a borrower to avoid certain obligations under a loan agreement.
A credit score is a numerical representation of a person's creditworthiness, based on their credit history, used by lenders to assess risk.
A corporate bond is a debt security issued by a corporation to raise capital, where the issuer pays interest to bondholders over time.
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