The company said in the bankruptcy filing that it has reached out to 30 “potential transaction parties,” including several competitors. If the Borrowers (Cineworld and its affiliates) find one of the higher bids to be “an offer that maximizes potential value, the second stage of the process will begin with the solicitation of binding offers.”
UK-based Cineworld filed for Chapter 11 in September in bankruptcy court in the Southern District of Texas. It announced earlier this month that it had begun a marketing process to find a strategic or financial buyer. A restructuring was also an option, but the company said it had not yet received a response to the restructuring proposal provided to the ad hoc group on December 1. “As a result, the debtors have made the marketing process their prime focus,” the filing said this week.
An ad hoc group in bankruptcy is a committee of creditors or bondholders who join together to pursue claims.
Cineworld said the process comes as it has been successful in “successfully stabilizing operations and … maintaining market share” despite box office receipts falling short of industry-wide projections.
It also emphasized, with some warmth, that it and it alone were running the sale process, warning interested parties not to attempt deals behind the company’s back.
“There will be no backdoor… Some outreach parties, including two competitors, have attempted to engage directly with ad hoc groups or some lenders in an attempt to undermine the debtors’ process. This will neither happen nor be tolerated. The Lenders shall facilitate interactions between the Ad Hoc Group and the Outreach Parties as necessary and at the appropriate time. But it is the debtors, not an ad hoc group or an individual lender, who will drive the marketing process. This process will not be reversed.
It said that the ad hoc group and the committee are in complete agreement with it.
Cineworld may refer to amc entertainment, which said last month it held talks with Cineworld lenders about acquiring Regal Assets — though those talks fell through. Following AMC’s statement, Cineworld clarified that neither it nor its advisors have participated in discussions with AMC regarding the sale of any of its cinemas. It also said that she would not sell any of her assets personally.
The AMC is facing some financial stress of its own. Today, it filed with the SEC that it amended the 2013 credit agreement to extend the loan contract moratorium by one year, to March 31, 2024. Shares, which closed down 3%, were up slightly in after-hours trading.