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Vue International, Europe’s largest independent movie theater operator, is in discussions with its shareholders and lenders on a fresh debt-for-equity restructuring. This comes after last year’s dual WGA and SAG-AFTRA strikes caused production delays and pushed a number of titles off of the 2023 and 2024 release calendars. Overall, the industry is facing a severe downturn in ticket sales across the coming year.
Under Vue’s plans, first reported by Sky News, hundreds of millions of pounds of the group’s existing debt will be converted to equity, with roughly £50M ($63.3M) of new capital injected into the company. The effect of converting existing debt into equity would reduce the circuit’s leverage and provide working capital.
In a statement provided to Deadline, Vue founder and CEO Tim Richards said, “The unforeseen and unprecedented six months of strike action by Hollywood actors and writers in 2023 has had a short and medium-term impact on the industry, pushing back the release of a number of movies and delaying the production of new content. We are in discussions with our shareholders and lenders to ensure the business has the right capital structure to thrive and maximize exciting opportunities ahead once the pipeline of new content improves later this year and in 2025.”
Vue operates 226 sites in nine countries including the UK, Ireland, Germany, Italy and Taiwan. The group completed a previous restructuring last January, giving it access to £75M ($95M) of additional liquidity with approximately £470M ($595M) of existing debt removed from the balance sheet. The company was taken over by its lenders, led by Barings and hedge fund Farallon Capital Management.
Sky cited a source who said the latest restructuring underlined Vue stakeholders’ confidence in the long-term prospects of the business. While there is volatility expected in the coming months throughout the exhibition sector, there is also optimism that audiences will turn up when a full pipeline of product is available.