European cinema chain Vue International has received approval from its lenders to receive a further £75 million ($88 million) to fund recapitalization of the company.
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Its lender syndicate unanimously approved the move, which is expected to be completed later this year.
According to the cinema chain: “This will enable Vue to implement the new money financing on a fully consensual basis with those lenders, such that the scheme of arrangement that was underway in connection with the transaction has been discontinued.”
Vue was keen to emphasise that landlords, suppliers and employees would not be impacted by the transaction.
“We are delighted to have gained 100% approval from our lenders on the new money and are grateful for their support,” said Tim Richards, founder and CEO of Vue International. “This represents a significant milestone in implementing the broader recapitalisation plan, which provides the appropriate capital structure to maximise future market opportunities.”
As Variety reported in July, Vue has signed an agreement for its first-lien lenders to take 100% equity ownership of the business. The new backers are believed to be financial investors and lenders as opposed to banks or private equity.
The news comes at a tough time for cinema chains, which are still reeling from the pandemic followed by a global cost of living crisis. According to a report in the Wall Street Journal, Vue competitor Cineworld is expected to file a chapter 11 petition in the U.S. and insolvency proceedings in the U.K.
In a bid to boost admissions, 3,000 theaters across the U.S. are set to take part in National Cinema Day this Saturday, Sept. 3, where tickets will be sold for a heavily discounted $3 each.
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