By Hannah Albarazi

Law360 (November 23, 2020, 5:47 PM EST ) Regal Cinemas' U.K.-based parent company said Monday it secured a $450 million loan and will issue equity warrants to help the movie theater behemoth weather the COVID-19 pandemic and avert any bankruptcy filings until audiences return to the big screen.

Cineworld Group PLC, which closed its theaters in the U.S. and U.K. in October after a brief reopening, said it secured over $750 million in additional liquidity — largely from the new debt facility and extension of an existing credit facility — and expressed optimism that movie theaters would reopen in 2021.

"The measures we are announcing today deliver over $750M of extra liquidity to support our business," said Mooky Greidinger, CEO of Cineworld, in a statement Monday. "We look forward to resuming our operations and welcoming movie fans around the world back to the big screen for an exciting and full slate of films in 2021."

When it shuttered its theaters in October, the company claimed that in the two months of reopening "there was not one COVID case resulting from visiting the cinema" and said it would resume operations once film studios are able bring major movie releases back to the big screen.

Its new $450 million three-year facility matures in 2024 and brings the company's aggregate gross debt financing to $4.9 billion, with a weighted average interest rate of approximately 4.5%.

Alicja Kornasiewicz, chair of Cineworld, said in a statement, "In light of the severe financial challenges facing the Group arising from the significant disruption to the entire industry, the board is confident this additional liquidity will preserve and maximise shareholder value over the long term."

Among other things, the new loan entitles lenders to appoint a board observer.

The company said Monday it will issue to participating lenders over 153.5 million equity warrants that, if fully exercised, will represent almost 10% of the company.

Cineworld has also secured a waiver of all bank financial agreements until June 2022 and secured an extension of maturity of its $111 million incremental revolving credit facility from next month until May 2024.

Cineworld, which is spending about $60 million a month while its theaters are closed, says it also expects to receive a $200 million tax refund in early 2021 and reached rent deferral agreements or new lease agreements with key landlords.

The company says it is prioritizing the welfare of its employees, customers and other stakeholders and that its theaters will remain closed until further notice. Last month the company said it was working with the UK Cinema Association, a trade group, to ensure lobbying of governments to support its employees and the industry.

"Given the uncertainty of the duration of the Covid pandemic, the Group has worked with its financial advisors to plan for multiple scenarios," Cineworld said in a statement Monday.

But Cineworld's base case scenario assumes a reopening of theaters no later than May 2021. If movie houses remain closed past May 2021, with the film industry unable to produce new blockbuster films, Cineworld says it expects to retain liquidity for a number of months after that but may require lender support to deploy it.

Cineworld became the second-largest cinema chain in the world in 2018 when it acquired U.S.-based Regal Entertainment Group for $3.6 billion. Investors challenging the merger went to trial in Delaware Chancery Court last month seeking a 47% higher appraisal.

Representatives for Cineworld did not immediately respond to a request for comment Monday.

--Editing by Andrew Cohen.

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