Canadian movie theater chain Cineplex Inc. has approached lenders to its bankrupt rival Cineworld Group PLC about reviving a potential merger with the U.K. company’s Regal Entertainment Group franchise, the Wall Street Journal reported. Cineplex has started early talks with Cineworld’s lenders about taking over the company’s U.S.-based Regal movie theater chain and handing them debt and stock backed by the merged business in return. Cineplex would need to garner broad-based lender backing for the merger and Cineworld hasn’t signaled support for merging its crown-jewel Regal chain with Cineplex in a bankruptcy deal. Cineworld doesn’t have a clear path out of chapter 11 yet, but it has the right to make its own restructuring offer to creditors before other alternatives can be proposed. Cineworld, which bought Regal for around $4 billion in debt and around $2.3 billion in stock in 2017, filed for bankruptcy with about $5 billion in debt. Its lenders are keeping it afloat through the chapter 11 process and have a significant say in the company’s postbankruptcy future.
