Vue International is reportedly close to agreeing to a £1bn debt refinancing, which will give its lenders ownership, to bolster its balance sheet post-pandemic.
Britain’s third-largest cinema chain expects the potential deal to return it to a sustainable financial footing.
Vue had been holding discussions for weeks regarding a £465mln agreement that would transform its current debt into equity, Sky News reported citing City sources.
This means Alberta Investment Management Corp and Omers, the Canadian pension funds, will surrender their shareholdings in the company.
The debt-equity-swap-deal would provide Vue with an extra £75mln of liquidity, as well as allowing it to continue in a post-pandemic fragmented global industry.
Vue’s restructuring, which is scheduled to take place in the latter months of 2022, will not impact employees, suppliers or landlords, insiders commented.
Meanwhile, Tim Richards, founder of Vue and British Film Institute chairman, believes “the second golden age of cinema” is coming in the wake of the Covid-19 era.
Each of the cinema chain’s markets outperformed the three-year average for admissions in the previous week, with it being the first time since reopening Vue landed successive weeks of more than 1.8mln customers.