Lenders prop up Cineworld with £680m cash injection
Cineworld has secured $785m (£677.4m) from existing lenders, who have sought to prop up the ailing retailer.
The cinema chain officially filed for bankruptcy in the US earlier this week, having announced last month that it was voluntarily seeking a Chapter 11 bankruptcy filing, sending shares down 25 per cent.
The company, which operates 747 cinemas across the US and the UK, revealed yesterday it had been granted access by a Texas bankruptcy court for the so-called “first day” capital relief.
In a statement, CEO Mooky Greidinger said the cash injection was “a positive step forward for the group” and its restructuring efforts.
“As we position Cineworld for long-term growth, through this Chapter 11 process and beyond, we remain steadfast in our commitment to providing our guests with the most memorable moviegoing experiences and maintaining our long-standing relationships with our business partners.”
Shares in Cineworld have been in freefall in the past few weeks, with shares down nearly 80 per cent in the past month, as it struggles with nearly $4.8bn (£4.1bn) of debt taken on prior to the pandemic.
The stock was down nearly eight per cent to 3.8p per share by Friday’s market close.
The company, founded in 1995, has total debt of £7.5bn, as well as a £800m legal bill over a deal to buy Canadian rival Cineplex.