May 2 (Reuters) – Bankrupt movie theater chain Cineworld (CINE.L) received U.S. court approval on Tuesday to raise $2.26 billion as part of its exit from bankruptcy, after reaching a settlement with a minority faction of lenders that had opposed parts of the exit financing.
Cineworld is aiming to emerge from Chapter 11 bankruptcy in the first half of 2023, with a proposal to cut $4.53 billion in debt, wipe out existing shareholders and transfer ownership of the company to its lenders.
U.S. Bankruptcy Judge Marvin Isgur at a hearing in Houston approved Cineworld’s plan to fund its post-bankruptcy operations with a new $1.46 billion loan and the sale of $800 million in new equity shares. Cineworld is scheduled to seek final court approval of its bankruptcy restructuring on June 12.
Isgur approved the financing after Cineworld announced a last-minute settlement that resolved objections raised by minority lenders including Jefferies Leveraged Credit, Glendon Capital Management and Greywolf Capital.
“I came out here not knowing whether we were going to have a fight or a deal,” Isgur said.
The settlement resolved a dispute over the amount of new stock that Cineworld’s lenders would receive for backstopping the exit financing.