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Cineworld Close to Hiring PJT as Adviser Ahead of Debt Talks

Antonio Vanuzzo, Luca Casiraghi and Katherine Doherty
·2 mins read

(Bloomberg) -- Cineworld Group Plc is close to hiring PJT Partners Inc. for advice as the theater company prepares to negotiate an overhaul of its debts with creditors, according to people familiar with the situation.

The company, which said on Monday that the pandemic is forcing it to close hundreds of theaters across the U.S. and Britain, is likely to appoint both financial and legal advisers this week, the people said, asking not to be named as it’s private. PJT, led by Paul J. Taubman, has already worked with the company this year when it secured a $250 million debt facility from a group of private institutional investors, according to the people.

Representatives for PJT declined to comment on the appointment. Officials at Cineworld also declined to comment.

The world’s second-biggest cinema chain took the decision to close theaters as distributors delayed major movie releases, including the latest James Bond premiere, that would have sustained theaters through the winter months. The move, effective Thursday, affects about 45,000 employees.

Read more: Cineworld Shuts Theaters on Film Delays, Risking 45,000 Jobs (3)

Cineworld’s $2.7 billion term loan tumbled Monday after the chain announced the temporary closures. The loan coming due in 2025 fell 6.5 cents on the dollar to trade around 57 cents, according to people familiar with the pricing.

Cineworld’s lenders organized and brought in operational advisers at FTI Consulting Inc. and financial advisers from Houlihan Lokey Inc. to engage with the company in future debt talks, according to people familiar with the matter. Representatives for FTI and Houlihan Lokey declined to comment.

The London-listed chain has already said it’s considering funding options to weather the pandemic, including obtaining around $200 million to $300 million of new financing. Fitch Ratings said in a report Monday that it expects Cineworld’s current liquidity may only last it until November or December if it doesn’t get any credit line extensions. The credit grader also slashed Cineworld’s rating three steps to CCC-.

The company’s debt soared to $8.5 billion from just $467 million in 2017 as it pursued an international expansion.

(Updates with loan trading, lender advisers in fifth and sixth paragraphs.)

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