NCMI - National CineMedia to cede control to lenders prepping for bankruptcy - WSJ

2023-03-16 17:22:43 ET

Cinema advertising giant National CineMedia ( NASDAQ: NCMI ) is in negotiations to hand over control to senior lenders as a step in a planned bankruptcy filing, the Wall Street Journal (WSJ) reported on Thursday, citing people familiar with the matter.

NCMI, like much of the movie industry, has struggled with falling revenues due to the impact of the COVID-19 pandemic on theatre attendance. Last month, it reportedly missed an interest payment on a due unsecured bond. The company had reported total liabilities of $1.23B as of September 29, 2022.

According to the WSJ report, NCMI's negotiations with creditors have focused on reaching a prearranged restructuring deal that could be implemented through Chapter 11. The company is expected to continue operating as usual.

National CineMedia ( NCMI ) did not immediately reply to a Seeking Alpha request for comment.

NCMI was formed as a joint venture between number one and number three U.S. movie-theatre chains AMC Entertainment ( AMC ) and Cinemark ( CNK ), along with Cineworld's ( OTCPK:CNNWQ ) Regal Cinemas. The three companies have served as NCMI's core customers.

As per NCMI's website, CNK holds a 51.18% stake in the company. Meanwhile, Regal Cinemas holds a stake in NCMI's operating company, NCM LLC.

NCMI has tapped law firm Latham & Watkins LLP as restructuring counsel, while FTI Consulting is serving as restructuring adviser and Lazard is the company's investment banker, WSJ said , citing the people familiar with the matter.

Bloomberg in September last year reported that NCMI creditors had tapped a banker to explore options.

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