Regal owner Cineworld unveils restructuring deal after sale plan fails

Cineworld, the owner of Regal cinemas, announced on Friday that it has abandoned plans to sell off its US and UK businesses following an extensive restructuring deal with creditors.

The move comes after Cineworld had faced mounting pressure from its lenders to reduce its debt burden amid the coronavirus pandemic, which has decimated the movie theater industry.

Under the restructuring deal, Cineworld will convert close to $2 billion of its debt into equity and raise additional funds from existing shareholders, allowing the company to reduce its debt by over $1.3 billion.

The plan was approved by the majority of Cineworld's creditors, including Apollo Global Management, Blackstone and Discovery Capital Management.

Cineworld CEO Mooky Greidinger said in a statement that the restructuring deal “will significantly improve the financial strength of our business, enabling us to focus on our recovery and growth plans.”

The restructuring deal comes as Cineworld had previously announced plans to sell off its US and UK businesses in order to reduce its debt. However, the company was unable to find a buyer, prompting it to abandon the plan and instead move forward with the restructuring deal.

Cineworld has been hit hard by the pandemic, with many of its theaters shut down for months due to health and safety concerns. The company has since reopened some of its US locations, but has yet to resume operations in the UK.

The restructuring deal is expected to help Cineworld get back on its feet and resume operations in the near future. The company has already resumed its dividend payments and is planning to open new theaters in the coming months.

Overall, the restructuring deal will allow Cineworld to reduce its debt and move forward with its recovery plans, all while avoiding a potentially costly sale of its US and UK businesses.