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Arnold & Porter Successfully Negotiates Rescue Loan for Cineworld on Behalf of Steering Committee of Term Loan Lenders

December 9, 2020

Arnold & Porter advised a steering committee of term loan lenders owed in excess of $2 billion with respect to the issuance of a new $450 million term loan facility to Cineworld Group Plc (Cineworld), a publicly listed company on the London Stock Exchange and the world's second-largest cinema chain.

The COVID-19 pandemic forced Cineworld to shut down its cinemas worldwide, essentially eliminating their ability to generate top line revenue. Cineworld's liquidity constraints, a potential covenant default and an impending maturity at the end of December forced Cineworld to seek rescue financing. Arnold & Porter's clients anchored Cineworld's existing $4 billion credit facility and determined to extend additional financing. Arnold & Porter led financing discussions among its 23-member steering committee, Cineworld and its largest equity holders, and the agent and lenders under certain incremental and revolving credit facilities. After two months of negotiations, the parties reached an agreement on financial and other terms that, along with other cost savings at Cineworld, created a financeable business for the lenders and provided Cineworld with much needed liquidity as it continues to navigate the adverse effects of the COVID-19 pandemic.

The deal provides our clients and Cineworld's other existing lenders with valuable economic incentives to participate in the new term loan facility, including the issuance of warrants for 9.99% of the fully-diluted ordinary share capital of Cineworld, as well as tightening covenants in the Cineworld's existing credit facility. The new term loan facility closed November 23, 2020.

Arnold & Porter's clients in the matter included Barings, Blackstone Credit, CIFC, Eaton Vance, and Invesco, among others.

The Arnold & Porter deal team was led by partner Mike Messersmith, chair of the firm's Bankruptcy and Restructuring Group, and partner Maja Zerjal Fink. The bankruptcy team also included partner Mike Solow, senior associate Sarah Gryll, and associates Lucas Barrett and Gerardo Mijares-Shafai. The finance team included partners Alan Glantz, Daniel Hartnett and Colin Tan; senior counsel Sheryl Gittlitz; senior associate Chad Pearlman; and associates Upton Au and Andrew Tepper. The corporate team included partners Mark Kingsley, Chris Peterson, Sean Scanlon, and Jeremy Willcocks; senior counsel Joel Greenberg; and associates Sean Corrado, Emilia Hunt and Tracey Klees. The litigation team included partner Jeff Fuisz; counsel Michael Lynn; senior associate Elie Salamon; and associate Molly McGrath. The real estate team included counsel Vickie Frankenburg, and the tax team included partners Laurie Abramowitz and Ben Berk, along with senior associate Sarah Soloveichik.