Lenders Take Control Of Giant Cinema Chain Through £1B Debt Restructuring
Lenders have taken control of Britain’s third-largest cinema chain in a deal they hope puts the business on a stable post-pandemic footing.
A large group of lenders led by U.S. asset manager Barings and hedge fund Farallon Capital has agreed to turn about £500M of Vue’s £1B of debt into equity in the company, Sky News reported. It will see the current majority owners, the Canadian pension funds AIMCo and OMERS, cede control. They paid £1B for Vue in 2013.
Vue had a record year in 2019, but like many leisure businesses was battered by the pandemic when cinemas were forced to close. The company has 91 sites in the UK and 285 across Europe, and it pays annual rent of about £107M.
Landlords will not be affected by the restructuring, Sky reported. During the pandemic, the company was at loggerheads with landlords over unpaid rent.
Following the debt restructuring Vue will have about £7M available to upgrade cinemas, and say they will continue to snap up smaller rivals.