A U.S. bankruptcy court has granted movie theater giant Cineworld Group access to up to $785 million in financing, with the company saying that is “expected to provide sufficient liquidity” for it “to meet its ongoing obligations.”
Cineworld, which operates the Regal cinemas in the U.S., and certain of its subsidiaries filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas earlier in the week and have now received approval from the United States Bankruptcy Court for the Southern District of Texas for “first day” relief related to its Chapter 11 proceedings.
As part of that, the court “granted the group immediate access to up to approximately $785 million of an approximate $1.94 billion debtor-in-possession (DIP) financing facility that, together with the group’s available cash reserves and cash provided by operations, is expected to provide sufficient liquidity for Cineworld to meet its ongoing obligations, including post-petition obligations to vendors and suppliers, as well as employee wages, salaries and benefits programs,” the company said. “The remainder of the DIP facility will become available upon court approval on a final basis.”
Cineworld added that the group Chapter 11 companies “intend to pay vendors and suppliers in full and on normal terms for valid amounts for goods and services received during the Chapter 11 process. Employees will also continue to receive their usual wages and benefits without interruption.”
The second-largest exhibitor in the world operates 747 sites and 9,139 screens in 10 countries.
The approval of the requested “first day” relief “is a positive step forward for the group and our restructuring efforts,” said Cineworld CEO Moshe “Mooky” Greidinger. “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.”