National CineMedia (NCM LLC), a cinema advertising network in the U.S., entered into a series of debt restructuring transactions that are expected to strengthen the company’s balance sheet and position the company for long-term growth. National CineMedia, Inc. (NCM Inc.), a non-filing entity, will remain the manager of NCM LLC.
To facilitate its debt restructuring, the company filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the Southern District of Texas and has entered into a comprehensive restructuring support agreement (RSA) with the support of its secured lenders, through which all of the company’s debt will be converted into equity of the reorganized company. Under the RSA, NCM LLC will assume all of its critical contracts upon emergence, ensuring that the company will maintain its advertising network.
“Our category-defining platform will continue to empower advertisers to reach our sought-after, young moviegoing audiences with scale and measurability. Today’s transactions will position us to deliver the strong results our advertisers and cinema partners have come to expect from us today and well into the future,” Tom Lesinski, CEO of NCM Inc., said. “We are entering this process with the overwhelming support of our secured lenders and key stakeholders, which we expect will enable us to swiftly and responsibly emerge as a stronger company.”
The RSA provides a roadmap for NCM LLC to emerge without disrupting its operations or customer relationships. Upon confirmation of the restructuring outlined in the RSA, all of NCM LLC’s funded debt will be converted into equity, completely de-levering the company’s balance sheet. Additionally, NCM Inc.’s management and NCM LLC’s other existing governance structures will be maintained to ensure continuity of ongoing operations and performance. NCM Inc. will receive an ownership interest in the restructured company of approximately 14%. Further, unless an official creditors committee is formed, all holders of general unsecured claims will be paid in full in the ordinary course under the RSA.
NCM LLC will operate its business without disruption during the Chapter 11 process. The company’s existing cash balances will provide the liquidity needed to continue operations in the ordinary course of business.
