Cineworld Reaches Deal With Creditors to Shave Billions of Debt

Amelia Pollard, Bloomberg News

A closed Cineworld Group Plc cinema in Leeds, U.K., on Wednesday, Feb. 17, 2021. U.K. inflation accelerated in January, boosted by the cost of furniture, household goods and food. Photographer: Anthony Devlin/Bloomberg , Bloomberg

(Bloomberg) -- Cineworld Group Plc is set to submit its bankruptcy-exit plan on Wednesday after reaching a deal with creditors to trim billions of dollars of debt from its balance sheet, according to a lawyer for the company.

Cineworld expects to file the plan alongside a restructuring support agreement — a deal in which a troubled company’s key creditors agree to back a debt-cutting proposal. Both agreements should be filed publicly on Wednesday, Josh Sussberg, a bankruptcy lawyer for Cineworld, said in a court hearing Tuesday.

“We are down to literally dotting ‘i’s and crossing ‘t’s,” Sussberg said. He didn’t provide further details on the plan.

The world’s second-largest theater chain, which owns Regal Cinemas in the US, has struggled to find buyers for the whole company in recent months. It has received no bids that come close to covering Cineworld’s $6 billion in outstanding secured debt, Sussberg said. A sale process for the holding company has effectively “been terminated,” he added.

However, there are several potential buyers interested in the company’s operations in eastern Europe and Israel, he said. Binding bids for that portion of the firm are due on April 10.

“Assuming that all this works out, this is going to be an excellent outcome,”said Robert Feinstein, a lawyer for the committee of unsecured creditors. The plan will likely put Cineworld in a “position to be competitive.”

The bankruptcy is Cineworld Group plc and Official Committee of Unsecured Creditors, 22-90168, U.S. Bankruptcy Court for the Southern District of Texas (Houston)