Monitoring Desk
ISLAMABAD: Cineworld, the parent company of Regal Entertainment Group, has received around 40 non-binding bids from potential buyers, but none have shown interest in the exhibition giant’s UK or US assets or come close to covering a $6 billion debt load.
Before Judge Marvin Isgur of the United States Bankruptcy Court in Houston on Tuesday, Joshua Sussberg, a lawyer for the United Kingdom-based Cineworld, stated during a virtual status session that the initial bids received by a Feb 16 deadline were all for the rest of the world assets, primarily theatres in Central Europe, Eastern Europe, and Israel.
While there was “some strategic interest in the entire business” during the initial sales process, Sussberg reported that none of the bids from prospective buyers were all-cash offers. “And no bid came close to the $6 billion in securities that are currently on the company’s balance sheet,” the Cineworld lawyer added.
Lack of firm bids for Cineworld
Due to the lack of firm bids for the entire Cineworld, the company is now moving towards a court-ordered settlement of its bankruptcy process, with no firm prospect of keeping the company intact, as interest in the east European assets in particular has emerged.
Cineworld and its lenders have set a 2nd final bid deadline of April 10 for a formal auction the following week on April 17. Simultaneously, the exhibitor and its creditors are negotiating a reorganization support agreement, which will most likely include a debt-for-equity transaction, to be cautiously considered and possibly approved by the court by the end of May.
Sussberg told the court that he admits that some major issues remain unresolved. But, on the professional side, they are all committed to working through and doing whatever it takes, whether that means sitting at home for multiple days to get this executed next week, as both parties remain committed to reaching an RSA agreement by the end of the week by Feb 27.
If a final agreement on Cineworld’s reorganization cannot be reached, the sale of some or all of Cineworld’s assets as part of a Chapter 11 bankruptcy settlement is expected to move to the front burner.
Cineworld, the world’s second-largest movie theatre company and owner of Regal Cinemas in the United States, filed for Chapter 11 bankruptcy in Texas in September 2022, citing lower admissions post-pandemic and a heavy debt load.
