- Vue restructuring after film delays
- Debt-for-equity transfer planned
- Hollywood strike impacts Vue
Vue International is nearing completion of preparations for its second debt-for-equity transfer in just over a year, following a sequence of postponed releases of critically acclaimed films.
Europe’s largest independent cinema operator, Vue International, is nearing completion of a new debt restructuring in the wake of a series of blockbuster films being suspended due to the Hollywood actors’ strike.
In an effort to position the company for long-term sustainability, Vue, headquartered in the United Kingdom, is currently coordinating its second debt-for-equity transfer in the past 18 months with the assistance of its lenders and shareholders.
The proposals call for the conversion of hundreds of millions of pounds of existing debt to equity and the infusion of approximately £50 million in new capital into the business.
“The unanticipated and unprecedented six months of strike action by Hollywood actors and writers in 2023 has had a short to medium-term impact on the industry, delaying the pipeline of new content and postponing the release of a number of anticipated films,” stated Tim Richards, founder and chief executive officer of Vue, over the weekend.
We are currently engaged in dialogues with our financiers and shareholders to ensure that the company has the appropriate capital structure to flourish and take advantage of promising prospects that will arise after the pipeline of new content improves in 2025 and later this year.
Industry Disruption and Vue’s Resilience
The strikes that occurred a year ago halted operations at the epicentre of the worldwide film industry, affecting studios, distributors, and cinema operators.
The crisis delayed the release of several titles, including Dune: Part Two, a highly anticipated sequel ranked among the most anticipated films of 2023.
Vue operates over 225 multiplexes in countries including the United Kingdom, Ireland, Germany, Italy, and Taiwan, and employs over 8,000 individuals.
According to one source, the most recent reorganisation bolstered the confidence of the company’s stakeholders in its long-term prospects. This year, the studio anticipates releasing the third installment of the Deadpool franchise, Beetlejuice 2, and Gladiator 2.
Nearly a year ago, under the direction of Mr. Richards, Vue successfully concluded a prior restructuring that resulted in the elimination of £470 million in debt and the takeover of the company by its debtors, an American hedge fund called Barings and Farallon Capital Management.
Following that, with the assistance of those firms, Vue investigated the possibility of acquiring portions of Cineworld, its more sizable multinational competitor, which entered into insolvency last year.
Although an agreement between Vue and Cineworld did not materialise, industry sources indicate that Mr. Richards continues to be enthusiastic about spearheading consolidation in the coming years.
Additionally, the long-term viability of AMC, the American proprietor of Odeon Cinemas, is uncertain.
Vue’s Leadership Transition and Evolution
Mr. Richards, who is approaching his resignation as chair of the British Film Institute, established Vue in its present format precisely two decades ago.
After Stella David resigned as temporary CEO of Entain, the FTSE-100 casino group, the company is looking for a new chair.
Canadian pension funds, Alberta Investment Management Corporation (AIMCo) and Omers, the previous proprietors of Vue, acquired the company in 2013 in a transaction valued at approximately £1 billion.
Following that, they oversaw a series of acquisitions that contributed to the group becoming the largest cinema operator in Europe.
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They began exploring the possibility of a sale in 2019, a record-setting year for Vue, but were unable to reach an agreement before the COVID-19 pandemic brought the leisure industry to its knees.
The organisation, similar to its competitors, was compelled to furlough thousands of employees based in the United Kingdom amidst the pandemic, and its locations remained closed for several months.
Mr. Richards encountered a brief dispute with Vue’s proprietors in the United Kingdom when he attempted to negotiate rent reductions for the duration of the closures.
It was uncertain, according to one banker, for how long Vue’s proprietors would attempt to retain control prior to selling or floating the company. However, stakeholders anticipated that the most recent reorganization would extend their tenure.
