Cinema advertising giant National CineMedia has been cleared by a Texas court to emerge from Chapter 11 bankruptcy protection as part of a previously agreed debt restructuring deal with major lenders.
National CineMedia, which is about $1.1 billion in debt to bondholders, said the United States Bankruptcy Court for the Southern District of Texas upheld its voluntary restructuring plan to get out of Chapter 11 in August or September 2023.
The news follows Regal Entertainment Group owner Cineworld, the world’s second largest exhibitor, announcing it will file for administration in the UK and delist its shares from the London Stock Exchange. That comes as part of its own debt-for-equity transaction that will see the movie theater chain emerge from U.S. bankruptcy protection in July as assets in the movie theater chain would be transferred to a newly formed company controlled by lenders.
The Chapter 11 filing followed after Cineworld failed to find buyers for some or all of the exhibition assets. National CineMedia’s business, like Cineworld, was hit by movie theater closures due to the COVID-19 pandemic, followed by the industry’s slow recovery since theaters reopened and advertising impacted by macroeconomic clouds .
Under the confirmed plan, National CineMedia will retain its existing corporate structure and management team to run the reorganized company, backed by a $55 million exit financing facility to fund operations and growth.
“Today’s announcement marks an important step forward in our financial restructuring, positioning the company for long-term success,” Tom Lesinski, CEO of National CineMedia, said in a statement.
Exhibitor AMC Theaters recently acquired shares in the cinema advertising company, because a registration application showed that its interest was 9.1 percent.