Cineworld to file for administration in the United Kingdom

Cineworld Group plc (LON: CINE) plans on filing for administration in the United Kingdom as part of a proposed restructuring plan.

Cineworld stock will no longer be listed on the LSE

Its shares will also delist from the London Stock Exchange in July, the cinema chain confirmed on Monday.

The stock market news arrives less than a year after Cineworld filed for bankruptcy protection in the U.S. At the time, it had close to $9.0 billion in net debt on the balance sheet.

The proposed restructuring will release roughly $4.53 billion of its debt and includes a rights offering to hoist about $800 million in gross proceeds. It, however, does not encompass any recovery for existing shareholders.

The pandemic-hit cinema chain is now exchanging hands at only 56 pence a share.

CINE expects to exit Chapter 11 proceedings in July

Once appointed, administrators will move all assets of Cineworld to its wholly-owned subsidiary – Crown U.K. Holdco Limited. The company’s update today also reads:

A newly incorporated company to be controlled by Group’s lenders will become sole owner of Crown, with Cineworld Group ceasing to have any interest in Crown or the rest of the group.

Cineworld still expects to come out of Chapter 11 bankruptcy protection next month. Its cinemas have continued to operate as usual during the restructuring.

Earlier this month, lenders agreed to pay up to $35 million combined to executives of the movie theatre company to sweeten their departure after it exits Chapter 11 proceedings in July. Cineworld operates more than 700 theatres worldwide.