CORRECTED-UPDATE 1-Theater advertiser National CineMedia files for bankruptcy protection
(Corrects company name in first paragraph to National CineMedia LLC, not National CineMedia Inc)
April 11 (Reuters) - National CineMedia LLC, the biggest movie-theater advertising business in North America, said on Tuesday it filed for bankruptcy protection and had entered into a restructuring agreement with its lenders.
This adds to the growing list of challenges facing the cinema industry, which has been hit hard by the pandemic and a lack of major film releases, and follows a similar move by Cineworld, which filed for U.S. bankruptcy protection in September.
In an effort to de-leverage its balance sheet, NCM said it entered into an agreement with its secured lenders to convert its debt into equity. The company will receive an ownership interest of about 14% in the restructured entity, it said.
Despite some progress in post-pandemic recovery, industry executives have cautioned that the sector is still a long way from returning to its pre-pandemic heights, with theaters and studios facing significant disruptions in production and attendance.
"Today's transactions will position us to deliver the strong results our advertisers and cinema partners have come to expect from us today and well into the future," Tom Lesinski, the chief executive officer of NCM Inc said in a statement.
The court filings in Texas showed that NCM listed its assets in the range of $500 million to $1 billion and liabilities in the range of $1 billion to $10 billion.
The development comes after AMC Entertainment Holdings Inc disclosed late on Monday that it had acquired a large stake in the cinema advertising platform, making it the second largest shareholder of NCM.
As part of the Chapter 11 filing, the company sought "first day" motions that, when granted, would enable day-to-day operations to continue as usual. The company expects to report a 44.4% increase in revenue to $91.7 million for the fourth quarter. (Reporting by Akriti Sharma in Bengaluru)
