Cineworld in the picture
Cineworld is the UK’s number one cinema operator in terms of box office market share. Recently, Cineworld effectively doubled its size through a merger with Cinema City International, to become the second-largest cinema operator in Europe with leading positions in CEE, Israel and the UK. ING acted as joint mandated lead arranger and bookrunner in a six-bank syndicate to provide a GBP 400 million credit facility.
In early 2014, Cineworld announced its combination with the cinema business of Cinema City International NV (“CCI”) by way of Cineworld’s acquisition of the shares in Cinema City Holding BV (CCI’s direct subsidiary that owns its cinema operation business). With 99 multiplexes with 966 screens in Poland, Hungary, CzechRepublic, Romania, Bulgaria, Slovakia and Israel, CCI was the largest cinema operator in Central & Eastern Europe and Israel. The company was majority owned by I.T. International Theatres Ltd, a holding company controlled by the Greidinger family, with the remaining ownership free floated on the Warsaw Stock Exchange.
“As an existing lender to both Cineworld and CCI, ING was an obvious choice when selecting banking partners to provide the financing for the transaction. We highly valued their input and advice during the structuring phase of the transaction, and with their support we were able to put together a cost-effective financing solution in a short period of time. We were highly confident in their ability to execute and they didn’t disappoint, and in addition we appreciated their transparency throughout the process. We expect to develop the relationship with ING going forward given the good match of our geographic footprint with ING’s presence in CEE” - Philip Bowcock, CFO Cineworld
The deal has effectively doubled Cineworld’s size and positioned the group as the second largest cinema operator in Europe with leading market positions in Central and Eastern Europe, Israel and the UK. The combination provides Cineworld with attractive growth opportunities in developing markets where multiplex screen penetration is comparatively low with low admissions per capita, high population per screen and low average ticket prices. As these markets develop, Cineworld can in time introduce its proven market share initiatives to these markets.
ING acted as joint mandated lead arranger and bookrunner in a six-bank syndicate to provide a GBP 400 million credit facility for Cineworld Group. The financing was structured as a 5-year facility comprising a GBP 275 million amortising term loan and a GBP 125 million revolving credit facility, each of which is available in GBP and EUR tranches. The syndicate comprised ING Bank, Barclays Bank, HSBC Bank, Lloyds Bank, the Royal Bank of Scotland and the Santander Group (Abbey National Treasury Services and Bank Zachodni).
“This is an exciting and unique opportunity for Cineworld to offer shareholders enhanced growth prospects and attractive returns via exposure to some of the most promising cinema markets in Europe. Cinema City is an extremely well-run and dynamic business, which creates a platform for further growth in future” - Anthony Bloom, chairman Cineworld
ING was an existing lender to both Cineworld and CCI, and was one of the first banks to be approached for the financing given its strong relationship with both management teams. As the facility and security agent in the CCI facility, ING assisted both CCI and Cineworld with the termination of the CCI facility which was required in order for the combination to proceed.