A shareholder meeting for the massive movie theatre chain Cineworld will be held on April 20 in connection with the ongoing Chapter 11 case in Texas bankruptcy court.
According to Cineworld, the meeting is mandated by UK securities law “in circumstances when the value of the company’s net assets is less than half of its called-up share capital” – formally “severe loss” of capital.”
To provide shareholders the opportunity to decide whether any action should be taken to address the situation, and if so, what that action should be.
Although the corporation admitted that it is unlikely that any plan of restructuring or sale transaction will materialise, many stockholders may not truly go beyond “consideration” as they get ready to be eliminated. The shareholders of Cineworld would benefit as a result.
The Board has called the general meeting to make sure that this issue is dealt with in accordance with the Act. The General Meeting will serve as a forum for talks between the Board and the Company’s shareholders, and Cineworld indicated in a filing that no resolution will be brought forward during the meeting.
The gathering in Brentford, West London, is set to start at 10 a.m.
Having filed for bankruptcy last fall, heavily indebted Cineworld had almost no money left in the bank despite a sluggish box office resurgence that has now faded. In order to provide a reorganisation plan before Judge Marvin Isgur of the US Bankruptcy Court for the Southern District of Texas, the corporation, its debt holders, and creditors are now working on one.
For properties like Regal in the US, Cineworld and Picturehouse in the UK and Ireland, and the “rest of the world” – or cinema in Central and Eastern Europe and Israel – a marketing process to sell the company is currently ongoing on a different, concurrent track.
At a hearing last month, a lawyer for the company stated that it had received tentative proposals for properties in the “rest of the world” and some interest from strategic purchasers for the entire company. Nothing for Regal at that time. In addition, “we did not get any cash bids, and no bids came anywhere close the $6 billion of secured debts that is on the company’s balance sheet today,” Cineworld attorney Joshua Susberg stated at the February 21 hearing. The final bids were due on April 10, he said.
Due to its crippling rent obligations, Cineworld is trying to close several theatres, including some of the larger Regal sites, and get rid of other leases by using the Chapter 11 procedure.
The parties also addressed a potential May 30 voting date on a reorganisation plan that has not yet been submitted before the hearing, although these discussions are ongoing and could take longer than expected.