Vue Cinemas Faces Imminent Lender Takeover
During the initial Covid-19 period in 2020-2021, we reported that VUE faced challenges from creditors and a potential CVA as a result of landlord demands.
Well, now it appears they’ve run out of time and will see these debt owners take over the company.
The company faces a £1 billion in recapitalisation that will see these lenders take ownership.
VUE which was founded and ran by industry figure Tim Richards is on the edge, and about to make this agreement that will reset the balance sheet.
Will VUE get an Equitable Takeover?
For weeks the company has been in talks with lenders that would see at least £465 million of existing debt converted into equity.
This means the debt for equity swap would see shareholders Omers and AIMCO drop their shareholdings.
They spent almost £1 billion back in 2013 and led a spree of acquisitions and takeovers to make VUE the largest exhibitor in Europe.
But just like Cineworld, they encountered financial problems from growing too fast as they entered 2020.
This deal would also add another £80m in liquidity and allow the company to go ahead and continue to operate as the box office market returns, and since the start of 2022, the company’s performance has seen a huge return to normality.
The company has over 228 sites with 2000 screens across the UK and Europe, and the deal will not affect landlords, suppliers or employees, and should be plain sailing.
But the fact remains that the company’s ownership will change hands to lenders, who will want a quick profit from their holdings you must imagine.
We don’t know how long they’ll keep the company before selling, or potentially floating it on the stock market.
What do you make of the news?
Will this be the only takeover of 2022?
Let us know in the comments below, we’d love to hear from you.
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