# Cineworld faces uncertain future as it enters Chapter 11

- Link: https://www.directorstalkinterviews.com/cineworld-faces-uncertain-future-as-it-enters-chapter-11/4121107839
- Published: 2023-02-24T09:53:43+00:00
- Author: Giles

**Cineworld Group Plc** (LON:CINE) and its subsidiaries have initiated Chapter 11
cases in the United States as announced on 7 September 2022. In the announcement,
the company mentioned the likelihood of significant dilution of existing equity 
interests and no guarantee of recovery for holders of existing equity interests 
in any transaction implemented through the Chapter 11 cases. Since then, the company
has been in discussions with its key stakeholders to develop a plan of reorganisation
that maximises value for all stakeholders in the long term. The company has also
been running a marketing process to pursue a value-maximising transaction for the
group’s assets.

The company has received non-binding proposals from several potential transaction
counterparties for some or all of the group’s business in connection with the marketing
process. However, none of these proposals involves an all-cash bid for the entire
business. The company is reviewing these proposals with its advisers and key stakeholders.
At this time, it is not expected that any sale transaction will provide any recovery
for the holders of the company’s equity interests.

Discussions between Cineworld and certain stakeholders regarding a potential plan
are progressing. However, due to the expected level of existing debt that would 
be released under any plan, the company does not believe there will be sufficient
creditor support for a plan that contemplates any recovery for equity interests.
Therefore, it is not expected at this time that any plan will provide any recovery
for holders of Cineworld’s existing equity interests.

Despite these developments, the company continues to operate its global business
and cinemas as usual without interruption. The company’s brands around the world
are welcoming customers to cinemas as usual, and the group is honoring the terms
of all existing customer membership programmes. Based on the current status of discussions,
it expects to emerge from the Chapter 11 cases during the first half of 2023, although
any sale transaction resulting from the marketing process may delay emergence beyond
the first half of 2023. Nevertheless, the company remains committed to emerging 
from the Chapter 11 cases as expeditiously as possible.

Cineworld Group share price was down 20% at the time of writing trading at 3.14GBX.

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