AMC competitor Cineworld (Regal) has now emerged from its Chapter 11 bankruptcy as it has successfully completed its financial restructuring process.
Former Warner Bros. top executive Ann Sarnoff will also be joining the Regal owners’ Board.
Unfortunately, shareholders have been wiped out as part of the financial restructuring, with a new, incorporated company controlled by lenders now controlling Cineworld, says The Hollywood Reporter.
According to the latest report, the movie theater chain and its various parts reduced their indebtedness by approximately $4.53 billion, raised approximately $800 million in new equity capital, and secured new debt financing worth approximately $1.71 billion.
“With this strengthened and recapitalized balance sheet, the group is well-positioned to pursue future strategic initiatives and continue providing leading cinematic experiences for customers globally, including through investments in new screen formats and enhancements to its flagship theaters,” the company said in a statement.
Cineworld stock was delisted on Monday morning.
Board member Eric Foss, who previously served as chair and CEO of Pepsi Bottling Group and Aramark, made the following statement:
“With a transformed balance sheet and a right-sized capital structure, Cineworld is ready and fully able to succeed in this dynamic and constantly changing movie theatre industry,” said Foss.
“I am truly excited to introduce the impressive group of directors who will be joining our new board and whose expertise and leadership in various fields will help us to grow Cineworld’s business and ensure that our theatres continue to be moviegoers’ first choice for memorable cinema experiences.”
Cineworld (Regal) is the world’s second largest movie theatre chain behind AMC Entertainment (NYSE:AMC).
AMC CEO Mentions Cineworld/Regal in New Letter to Shareholders
On July 24, AMC CEO Adam Aron published a letter to shareholders highlighting his thoughts on several things, with risk at the forefront.
He made the following statement;
“AMC must be in a position to raise equity capital. I repeat, to protect AMC’s shareholder value over the long term, we MUST be able to raise equity capital.
That is especially the case now with the added uncertainty caused by the writers and actors strikes, which could delay the release of movies currently scheduled for 2024 and 2025.
If we are unable to raise equity capital, the risk materially increases of AMC conceivably running out of cash in 2024 or 2025, or of AMC being unable to satisfactorily refinance and stretch out the maturity of some of our debt (which is required of us beginning as early as 2024.)
The risk of financial collapse is not whimsical.
Cineworld/Regal, the second largest movie theatre chain in the world, fell into bankruptcy and their equity holders were essentially wiped out.
Bed, Bath and Beyond which was viewed as the third most watched meme stock, also fell into bankruptcy and their equity holders also were essentially wiped out.
Fortunately, at AMC, we have been much smarter, much more agile and much more skillful.
We have risen to every Covid challenge heretofore, and I have every confidence in our continued ability to successfully navigate through these complicated times,” Adam Aron said in his letter.
AMC recently announced new high breaking records in its entire 103-year history.
“In addition to last weekend being the highest grossing AMC weekend in 4 years, the week of July 21-27 was the highest grossing for AMC in our entire 103-year history. The best in ONE HUNDRED AND THREE YEARS !!!
And there’s more. The boom at our theatres continued this weekend. Thurs to Sun July 27-30 was the 3rd top box office weekend for AMC globally since we reopened in 2020 after pandemic closures. This follows last weekend being the 1st highest grossing weekend since our reopening,” said Adam Aron on Twitter.
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