Cineworld files bankruptcy exit plan

BY Richard Summerfield

Cineworld, the London-listed cinema chain, which filed for bankruptcy protection in the US in autumn 2022, has filed a reorganisation plan with a Texas bankruptcy court which will effectively wipe out its existing shareholdings.

The filing with the US Bankruptcy Court for the Southern District of Texas, Houston Division formalises a deal that was first outlined on 3 April, which intends to cut the company’s debt by about $4.53bn and raise $2.26bn in funds to emerge from bankruptcy. The plan does not provide for any recovery for its existing shareholders, the group said.

Cineworld is “seeking to confirm the plan on an expeditious timeline” and reiterated its expectation that it can emerge from the Chapter 11 bankruptcy strictures “during the first half of 2023”. The plan is subject to court approval and Cineworld acknowledges that court approval depends on certain creditor approvals.

“This agreement with our lenders represents a ‘vote-of-confidence’ in our business and significantly advances Cineworld towards achieving its long-term strategy in a changing entertainment environment,” said Mooky Greidinger, chief executive of Cineworld. “With a growing slate of blockbusters and audiences returning to cinemas in increasing numbers, Cineworld is poised to continue offering moviegoers the most immersive cinema experiences and maintain its position as the ‘Best Place to Watch a Movie’.”

In a filing, Cineworld said that its proposal to the court is supported by lenders holding and controlling approximately 83 percent of the group’s term loans due 2025 and 2026 and revolving credit facility due 2023, and approximately 69 percent of the debtors’ outstanding indebtedness under the debtor-in-possession financing facility previously agreed with the court.

Cineworld last week dropped plans to sell its businesses in the US, the UK and Ireland after failing to attract a suitable buyer. The company is seeking to continue to operate its global business and cinemas as usual without interruption. However, the company will “continue to consider the proposals that were received in respect of its ‘rest of the world’ business”.

Cineworld, the second largest cinema operator in the world, also operates the Regal, Cinema City, Picturehouse and Planet cinema brands.

News: Cineworld Expects Exit From Chapter 11 in Next Three Months, Files Formal Reorganization Plan

Virgin Orbit comes back down to earth

BY Richard Summerfield

Virgin Orbit Holdings, Inc. and its US subsidiaries, has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court in the District of Delaware. The company, which is 75 percent owned by Virgin Group, has filed for bankruptcy in order to seek a sale of its assets.

Virgin Investments, one of Virgin Orbit’s sister companies, will inject $31.6m into the satellite launcher to help it stay afloat while the business searches for a new owner. Virgin Orbit said it planned to pay its suppliers and vendors “to the fullest extent possible” and was committed to working with customers to try to find a buyer “able to continue to fulfil their needs”.

“The team at Virgin Orbit has developed and brought into operation a new and innovative method of launching satellites into orbit, introducing new technology and managing great challenges and great risks along the way as we proved the system and performed several successful space flights – including successfully launching 33 satellites into their precise orbit,” said Dan Hart, chief executive of Virgin Orbit. “While we have taken great efforts to address our financial position and secure additional financing, we ultimately must do what is best for the business. We believe that the cutting-edge launch technology that this team has created will have wide appeal to buyers as we continue in the process to sell the Company. At this stage, we believe that the Chapter 11 process represents the best path forward to identify and finalize an efficient and value-maximizing sale.

“I’m incredibly grateful and proud of every one of our teammates, both for the pioneering spirit of innovation they’ve embodied and for their patience and professionalism as we’ve managed through this difficult time,” he continued. “Today my thoughts and concerns are with the many talented teammates and friends now finding their way forward who have been committed to the mission and promise of all that Virgin Orbit represents. I am confident of what we have built and hopeful to achieve a transaction that positions our Company and our technology for future opportunities and missions.”

In late March, the company announced it was laying off 85 percent of its 750 staff and ceasing operations for the foreseeable future as it was unable to raise sufficient out-of-court capital to continue operating its business. The company aborted the UK’s first satellite launch from Cornwall in January, blaming an “anomaly”.

News: Virgin Orbit: Richard Branson's rocket firm files for bankruptcy

Mountain Express files for Chapter 11 bankruptcy protection

BY Richard Summerfield

Mountain Express Oil Company and certain other affiliated companies have filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Southern District of Texas.

According to the company’s court filing, Mountain Express’ retail network will continue normal operations. The company will use cash collateral to fund and protect its operations if the court rules in its favour, alongside normalising operating cash flows to reach “value-maximising”.

Mountain Express has also confirmed in a press release, that it was in advanced discussions with its secured lenders regarding a commitment of debtor-in-possession financing, which will provide additional liquidity to the company and assure its ability to meet its post-petition obligations in the ordinary course of business. Mountain Express will continue discussions with its financial stakeholders, including critical conversations with its landlords and other key constituents to maximise value for all stakeholders.

“Through this process, Mountain Express will continue to transform the business for the future while bolstering our financial position,” said Turjo Wadud, chief executive of Mountain Express. “I am confident in the strength of our business and our team and look forward to achieving a comprehensive resolution that will best position Mountain Express for long-term success. We continue to have a robust pipeline and will continue to provide opportunities for our dealers, partners, and employees. During this process, we intend to maintain the underlying durability of our business as well as our strong relationships in the industry.”

Mountain Express, which was founded in 2000, currently operates a network consisting of 828 fuelling sites and 27 travel centres throughout 27 states in the US. Its associations include partnerships with major firms such as ExxonMobil, BP, Shell, Chevron, Texaco and Sunoco. The company also has a dealer joint venture with Pilot Co., Knoxville, Tennessee Since 2013, Mountain Express has distributed more than 1.1 billion gallons of fuel, it said.

In 2021, Mountain Express completed a $205m debt financing, which the company said it will use to refinance its existing credit facilities and to support its growth objectives. Later in the year it acquired Brothers Food Mart in New Orleans, which had 50 locations. It also acquired 24 retail locations and the wholesale fuel assets of Texon Oil Inc. in Medford, New Jersey. And in 2022, Mountain Express purchased the 26-unit The Store brand of convenience stores from Team Schierl Cos.

News: Mountain Express Oil to Restructure Following Chapter 11 Filing

Failed battery firm gets a Recharge

BY Richard Summerfield

Recharge Industries, an Australian portfolio company of privately owned US firm Scale Facilitation, has been successful in its bid for ownership of Britishvolt, the battery manufacturer which collapsed into administration in January.

Under plans presented by Recharge Industries, the Britishvolt project will make the UK’s first gigafactory a reality, creating a strategic economic and security asset which will play a critical role in the UK’s industrial and net-zero strategies. The newly acquired Britishvolt will provide thousands of green, skilled and local jobs that will drive local and national benefits, according to a statement announcing the deal.

“We are thrilled to have been successful in our bid for ownership of Britishvolt; our plans are the right ones for the local community and the UK economy,” said David A. Collard, founder and chief executive of Scale Facilitation. “Our proposal combined our financial, commercial, technology and manufacturing capabilities, with a highly credible plan to put boots and equipment on the ground quickly. Our technology – including an exclusive license for the intellectual property and battery technology – has been developed and validated over the last decade through C4V in the US and will be the backbone of both gigafactories in Geelong and Cambois. Backed by our global supply chain, strategic delivery partners and a number of significant customer agreements in place, we’re confident of making the Cambois Gigafactory a success and growing it into an advanced green energy project.”

The original Britishvolt was intended to create a home-grown EV battery industry that can support domestic car production, but the company collapsed in January after failing to raise enough funding for the factory in northern England. The company was a much-heralded part of the UK government’s ‘levelling up’ agenda, however Britishvolt had only raised around £200m by summer 2022 and had pushed back its production timeline. The government had offered £100m to the former Britishvolt owners if they hit certain construction milestones, but they were not met.

The company was planning to build its 30GWh factory in phases to take advantage of rising EV demand ahead of the UK’s 2030 ban of new petrol and diesel cars. The plant, located near Blyth in Northumberland, was expected to employ about 3000 people when operating at full capacity.

Going forward, the new owners will keep the Britishvolt brand name but will focus on batteries for energy storage and hope to have those products available by the end of 2025. Recharge also plans to build a battery factory in Geelong, a former car manufacturing hub in Australia, free from Chinese and Russian materials.

News: Australia's Recharge Industries buys failed battery firm Britishvolt

Starry files for Chapter 11 bankruptcy

BY Richard Summerfield

Boston-based internet service provider Starry Group Holdings Inc. has filed for pre-packaged Chapter 11 bankruptcy protection in an attempt to reduce its debt load while maintaining customer and network operations in five cities.

The company, which filed for Chapter 11 restructuring in the US Bankruptcy Court for the District of Delaware, has filed various motions with the Court, including one for approval of a $43m debtor-in-possession (DIP) financing facility to give it the liquidity to continue operations throughout the process. Starry has approximately $270m in assets versus $310m in total debt, according to a court document.

The bankruptcy filing comes on the back of a bruising period for the company. In January, Starry announced its decision to pull out of one of its markets – Columbus, Ohio – and lay off staff. 2022 was a challenging year as the company defaulted on the opportunity to pick up government funding and found itself the subject of endless speculation on its financial position. In October 2022, Starry laid off around half of its workforce - about 500 people - as the company did not “have the capital to fund our rapid growth”, according to Chet Kanojia, chief executive of Starry. As such, the company was going to focus on its core business of serving multitenant buildings in bigger urban markets.

“Over the last several months, we’ve taken steps to conserve capital and reduce costs in order to put Starry in the best position to explore various financing paths for the company,” said Mr Kanojia. “Our next step in this journey is to continue to strengthen our balance sheet through a Chapter 11 restructuring process. With the support of our lenders, we feel confident in our ability to successfully exit this process as a stronger company, well-positioned to continue delivering an affordable, high-quality broadband experience to our customers.

“The Restructuring Support Agreement provides us with the funding needed to continue operating as normal, through this restructuring process and as we guide the company to profitability. We have a strong and experienced team in place and look forward to moving through this process quickly so that we can continue expanding essential broadband access and #HappyInterneting to more communities across the country,” he added.

Starry currently operates in Boston, New York City, Los Angeles, Denver and Washington, DC, and reported nearly 91,300 customers at the end of September - an increase of 66 percent year-on-year.

News: Starry’s troubles continue as it files for Chapter 11