Loews Cineplex Entertainment took a big step toward emerging from bankruptcy Thursday, winning court approval of a $900 million reorganization plan giving Canadian conglom Onex and L.A. buyout firm Oaktree Capital 100% ownership of the nation’s third-biggest theater circuit.
“We have to finalize our exit financing with the banks and finish all the legal documentation,” said spokeswoman Mindy Tucker. “(But) we expect to announce emergence from bankruptcy around mid-March.”
Loews was one of a dozen major U.S. circuits to slip into Chapter 11 bankruptcies over the past couple of years. The spate of reorg filings followed an industrywide building binge that piled exhibs high with debt and prompted cutthroat competish among rival circuits.
So far, Loews has arranged for Onex-Oaktree to convert $300 million in debt to equity, restructured $440 million in old bank debt and retained assorted other existing loans. Gotham-based exhib also has a commitment letter from Deutsche Banc Alex. Brown for $140 million, which must be finalized.
A March 4 hearing is skedded in U.S. Bankruptcy Court in New York to seek formal court sanction of the reorg plan. Creditors have already endorsed the plan.
Loews owners previously included Sony and Universal. By last year, the studios had cashed out or written off their respective stakes in the chain, which dated from separate interests in Loews Cineplex predecessors Loews and Cineplex Odeon.
A Canadian unit continues to operate as Cineplex Odeon. Loews Cineplex operates 2,445 screens in 263 locations in the U.S., Canada and Europe and remains a partner in Magic Johnson Theaters, Star Theaters, Yelmo Cineplex de Espana and Megabox.