UK’s Cineworld gets nod to access about $785 mln financial aid, shares jump

People walk past a Cineworld in Leicester Square, amid the coronavirus disease (COVID-19) outbreak in London, Britain, October 4, 2020. REUTERS/Henry Nicholls/File Photo

Sept 9 (Reuters) – Movie chain operator Cineworld Plc (CINE.L) said on Friday a U.S. bankruptcy court had granted it access to up to $785 million of an about $1.94 billion financial aid it had secured from existing lenders as part of its Chapter 11 filing.

Cineworld Group filed for bankruptcy protection in the United States earlier this week, as the world’s second-largest cinema chain operator struggled to rein in its massive debt. read more

The company said it received the approval for access to funds from the United States Bankruptcy Court for the Southern District of Texas, adding that along with company’s available cash reserves, it expected to have sufficient liquidity to meet its ongoing obligations.

The Chapter 11 filing involves Cineworld’s U.S., UK and Jersey operations, covering the bulk of its business.

Shares of Cineworld were up 9% at 4.51 pence following the announcement.

The group, that has been struggling with debt amassed over the years, said the remainder of the financial aid will become available upon court approval on a final basis.

The Regal Cinemas parent, which operates more than 9,000 screens across 10 countries and employs around 28,000 people, took on debt to fund part of its $3.6 billion purchase of Regal in 2017, and more to survive the pandemic.

Reporting by Sinchita Mitra in Bengaluru; editing by Uttaresh.V and Rashmi Aich

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