From Proactive Investors: “Shares in Cineworld Group PLC (LSE:CINE) soared over 275% after agreeing a bankruptcy settlement with its landlords and lenders, clearing the way for the company to borrow an additional $150mln and make a $1bn debt repayment.
The group, which filed for bankruptcy protection in Texas in September with less than $4mln in cash on hand, previously did not intend to make any post-September rent payments until the end of its bankruptcy.
US bankruptcy judge Marvin Isgur signed the order on Monday afternoon in Houston after landlords and junior creditors dropped their opposition to the billion-dollar debt repayment after Cineworld agreed to pay at least $20mln in rent that will accrue after 30 September.
Isgur said that the agreement was a “pretty amazing” result given the widespread landlord and creditor opposition to Cineworld’s bankruptcy financing at the start of its Chapter 11 case.
Creditors had filed 15 objections to the loan in court, and the company resolved about a dozen more objections before they were filed, Cineworld attorney Christopher Marcus said in court.
“This order isn’t perfect but is a very commercially reasonable result,” attorney Robert LeHane, whose landlord clients have leases in 120 locations, told Isgur.
Cineworld, which owns Regal Cinemas, operates more than 9,000 screens across 10 countries and employs around 28,000 people.”
I have to say, as a long term holder of Cineworld, I am pretty surprised by this result. My average is about 18p so I’m about halfway to breakeven now, and I’m fully intending on holding until I reach that point (I’m only 26 and quite happy to hold til I die tbh if that’s what it takes). I’m bullish on cinemas in general and believe investors have way oversold the idea of streaming, and the huge giant asterisk against CINE was the momentous debt that it’s been holding due to the pandemic. Now that is somewhat alleviated, I’m very interested to see where we can go from here.
