European Cinema Giant Vue’s Takeover by Lenders Allows Movie Chain to ‘Get Back to Where We Were Before,’ Says CEO

variety.com:

Manori Ravindran International EditorEuropean cinema giant Vue will see its lenders take full ownership of the company in a £1 billion ($1.18 billion) takeover as the exhibitor battles back following the pandemic.Vue confirmed on Thursday that its first-lien lenders will take 100% equity ownership of the business.

Under the new deal, around £465 million ($548 million) of debt will be converted into equity. The recapitalization will help Vue raise £75 million of additional liquidity.The deal sees Vue’s main backers, the Alberta Investment Management Corporation (AIMCo) and Canadian pensions fund Omers, relinquish their shareholdings nine years after first taking control of Vue for around £1 billion in 2013.

The company’s new backers are understood to be financial investors and lenders that aren’t banks or private equity. “We’re doing everything because we’re conservative as a company, and we want to ensure we don’t have a problem in the future,” Vue CEO Tim Richards told Variety. “We saw the peaks and troughs and the lumpiness of the year, and we were concerned about the liquidity that could happen in the fourth quarter of this year.”Richards points out that Q4 seems “quiet” for releases leading up to James Cameron’s “Avatar 2” in December.“We entered the conversation with our lenders to be prudent, and the deal now allows the company to deleverage and get back to where we were before,” added the executive, who is expected to stay on as CEO.Vue’s recapitalization plan will look to complete later this year, and the company has said that “no landlords, suppliers or employees” will be impacted by the deal.Prior to the pandemic, Vue had enjoyed its biggest trading period in the 12 months leading up to the end of February.