Consenting creditors holding greater than two-thirds in principal amount of prepetition first lien loans support the contemplated reorganization process
Chuck E. Cheese and Peter Piper Pizza locations, if not already open, will continue to re-open in accordance with all CDC, federal, state and local guidelines
IRVING, Texas, Sept. 4, 2020 /PRNewswire/ -- CEC Entertainment, Inc. ("CEC" or the "Company"), a nationally recognized leader in family entertainment and dining, today announced that it has entered into a plan support agreement ("PSA") with consenting creditors holding greater than 66-2/3% in principal amount of outstanding obligations under the Company's prepetition first lien credit agreement. CEC has also received a commitment for $200 million in debtor-in-possession financing from certain of its first lien lenders to support ongoing business operations and reorganization expenses as it explores a value-maximizing transaction and seeks to emerge from Chapter 11.
Chuck E. Cheese and Peter Piper Pizza continue to serve guests, host birthday parties and events and provide families with wholesome entertainment over great food in compliance with all applicable health and safety guidelines.
The Company and the consenting creditors that are parties to the PSA have agreed to the terms of a comprehensive financial restructuring, including a Chapter 11 plan premised on (i) a sale of the Company's reorganized equity or substantially all of its assets; (ii) a credit bid for a sale of substantially all of the Company's assets by the Company's first lien lenders; or (iii) a debt-for-equity exchange. Under the terms of the PSA, the Company will continue its ongoing solicitation of interest from third parties in a potential sale transaction involving the Company. The principal terms of the Chapter 11 plan that the Company and the consenting creditors have agreed to pursue, together with the other principal terms of the Company's agreed-upon reorganization process, are set forth in a term sheet attached as an exhibit to the PSA and available on the online docket of the United States Bankruptcy Court for the Southern District of Texas, Houston Division or at https://cases.primeclerk.com/cecentertainment/.
"We are pleased to have reached agreement with a substantial majority of our first lien lenders on a comprehensive balance sheet restructuring that will support our re-opening and longer-term strategic plans," said David McKillips, CEC's Chief Executive Officer. "This agreement and financing demonstrate our creditors' confidence in our go-forward business plan and will enable CEC to complete this financial restructuring process in a timely manner."
As of September 4, 316 company-operated Chuck E. Cheese and Peter Piper Pizza restaurant and arcade venues had safely reopened in accordance with all CDC, federal, state, and local guidelines. A list of open locations and services provided can be found on https://www.chuckecheese.com/reopening-directory and https://www.peterpiperpizza.com/locations. The Company plans to continue opening additional locations as it is safe to do so, steadily bringing more employees back to work.
Additional information, including a management presentation, can be found at https://cecentertainment.gcs-web.com/investor-overview.
Weil, Gotshal & Manges LLP is serving as legal counsel, PJT Partners is serving as investment banker, FTI Consulting is serving as financial advisor, and Hilco Real Estate is serving as real estate consultant to CEC in connection with the Company's Chapter 11 cases.
This press release includes statements that may constitute "forward-looking statements" that are not historical facts, including statements about the beliefs, expectations, estimates, future plans, and strategies of CEC including, but not limited to, statements about the Chapter 11 cases and the Company's ability to continue operating in the ordinary course while the Chapter 11 cases are pending. These statements are based on current expectations and assumptions, which management believes are reasonable, and on information currently available to management, but are necessarily subject to various risks and uncertainties. In addition to the risk that these assumptions prove to be inaccurate, factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include factors disclosed in CEC's annual report on Form 10-K, as amended, for the year ended December 29, 2019, and subsequent reports filed with the Securities and Exchange Commission (the "SEC"), which are available on CEC's website at https://cecentertainment.gcs-web.com/investor-overview and on the SEC website at www.sec.gov. Additional factors include, but are not limited to, those associated with the Chapter 11 cases commenced on June 24, 2020 and those associated with the COVID-19 global pandemic. CEC undertakes no obligation to publicly update or revise any forward-looking statements, whether due to new information, future events or otherwise, except to the extent required by law.
About the Company
CEC Entertainment, Inc. is a nationally recognized leader in family dining and entertainment with both its Chuck E. Cheese and Peter Piper Pizza restaurants. As the place where a million happy birthdays are celebrated every year, Chuck E. Cheese's goal is to create positive, lifelong memories for families through fun, food, and play and is the place Where A Kid Can Be A Kid®. Committed to providing a fun, safe environment, Chuck E. Cheese helps protect families through industry-leading programs such as Kid Check®. As a strong advocate for its local communities, Chuck E. Cheese has donated more than $16 million to schools through its fundraising programs and supports its national charity partner, Boys and Girls Clubs of America. Peter Piper Pizza features dining, entertainment and carryout with a neighborhood pizzeria feel and "pizza made fresh, families made happy" culture. Peter Piper Pizza takes pride in delivering quality food and fun that reconnects family and friends. With a bold design and contemporary layout, an open kitchen revealing much of their handcrafted food preparation, the latest technology and games, and beer and wine for adults, Peter Piper Pizza restaurants appeal to parents and kids alike. The Company and its franchisees operate a system of 568 Chuck E. Cheese and 122 Peter Piper Pizza venues, with locations in 47 states and 16 foreign countries and territories. For more information, visit chuckecheese.com and peterpiperpizza.com.
View original content:http://www.prnewswire.com/news-releases/cec-entertainment-secures-plan-support-agreement-200-million-of-debtor-in-possession-financing-chuck-e-cheese-peter-piper-pizza-continuing-to-serve-guests-as-company-continues-marketing-process-to-explore-going-concern-sale--301124718.html
SOURCE CEC Entertainment, Inc.