Cineworld seeks another extension to Regal shareholder payments

4th May 2022 08:28

(Sharecast News) - Cineworld said on Wednesday that it was looking to delay its payments to former Regal Entertainment shareholders further, having agreed an extension already in February.

The London-listed cinema operator had agreed to pay $170m (£135.82m) to ex-owners of Regal shares in September, disgruntled with the price Cineworld paid for the US chain.

In February, it agreed a three-month extension to pay the remaining $79.3m, in instalments by 30 June.

"Cineworld today announces that it has approached the Regal litigation parties to engage in discussions in relation to a further rescheduling of the group's payment obligations under the unsecured facility agreement," the board said on Wednesday.

"In order to facilitate these discussions, Cineworld has obtained from lenders under certain of its debt facilities waivers of, or undertakings to waive, any events of default arising under those facilities as a result of non-payment under the unsecured facility agreement.

"Cineworld also expects to obtain equivalent waivers from holders of its guaranteed convertible bonds due 2025."

Cineworld said it had initiated the discussions with the aim of "maximising its available liquidity", and was hopeful that a "satisfactory agreement" could be reached.

The company took on significant amounts of debt when it agreed the £2.4bn acquisition of Regal in early 2018, and has struggled in terms of cash flow throughout the Covid-19 pandemic, with its locations forced to close for extended periods of time.

At 0923 BST, shares in Cineworld Group were down 1.22% at 29.86p.