On Monday, Cineworld announced that more than 80% of its creditors had agreed to a debt swap worth USD 4.53 billion for equity. In addition, the creditors will provide an extra $800 million by issuing a 25% discount on the implicit equity value of the new company, and they will offer an additional USD 1.46 billion for new debt financing if the company exits Chapter 11. The existing shareholders of Cineworld will be wiped out completely, as the company had previously warned. The COVID-19 pandemic forced governments worldwide to close cinemas, which critically impacted Cineworld's revenue, and the company incurred significant debt to acquire Canadian Cineplex. Efforts to withdraw from this deal were cancelled by Canadian courts, leaving Cineworld with no escape from its debts. The recapitalization will fully pay off the USD 1.94 billion in debt agreed upon at the beginning of the Chapter 11 process to finance the debtor’s holdings. Cineworld is still in talks to sell its cinemas outside the United States, Great Britain, and Ireland.

Movement of Cineworld in the last 5 years. (Source: Investing)