TORONTO, July 7, 2020 /CNW/ - Cineplex Inc.
("Cineplex" or the "Company") (TSX: CGX) today announced that
it has filed a preliminary short form prospectus in connection with
a marketed public offering (the "Offering") of convertible
unsecured subordinated debentures (the "Debentures"). The Offering
will be priced in the context of the market with terms to be
determined at the time of entering into an underwriting agreement.
It is currently anticipated that the size of the Offering will be
$275 million aggregate principal
amount of Debentures.
The Company will also grant the Underwriters an over-allotment
option to purchase up to an additional 15% of the Debentures to be
sold pursuant to the Offering (the "Over-Allotment Option"). The
Over-Allotment Option will be exercisable for a period of 30 days
from the closing date of the Offering.
The Offering is being made through a syndicate of underwriters
led by Scotiabank and including BMO Capital Markets, RBC
Capital Markets, CIBC Capital Markets, National Bank Financial Inc.
and TD Securities Inc.
The Debentures will mature and be repayable on September 30, 2025 (the "Maturity Date") and will
bear interest at the rate determined at the time of pricing,
payable semi-annually in arrears on September 30 and March
31 in each year (the "Interest Payment Date"), commencing on
September 30, 2020. At the holder's
option, the Debentures may be converted into common shares of the
Company (the "Common Shares") at any time prior to the close of
business on the earlier of: (i) five business days prior to the
Maturity Date, and (ii) if called for redemption, five business
days immediately preceding the dated fixed for redemption of the
Debentures, at a conversion price to be determined at the time of
pricing. Holders who convert their Debentures will receive accrued
and unpaid interest for the period from the date of the latest
Interest Payment Date to the date of conversion.
The Debentures will be direct, unsecured subordinated
obligations of the Company, subordinated to any senior indebtedness
of the Company and ranking equally with one another and with all
other existing and future unsecured subordinated indebtedness of
the Company.
The Debentures will not be redeemable by the Company prior to
September 30, 2023. On or after
September 30, 2023 and prior to
September 30, 2024, the Company may,
at its option, redeem the Debentures in whole or in part from time
to time provided that the volume weighted average trading price of
the shares of the Company on the Toronto Stock Exchange during the
20 consecutive trading days ending on the fifth trading day
preceding the date on which the notice of redemption is given is
not less than 125% of the conversion price. On or after
September 30, 2024, the Debentures
may be redeemed in whole or in part from time to time at the option
of the Company at a price equal to their principal amount plus
accrued and unpaid interest.
The Company will use the net proceeds of the Offering to repay
indebtedness under its credit facilities, of which $100 million would be a permanent repayment and
the balance would be available for borrowing under the Company's
revolving credit facility.
Completion of the Offering will be subject to various
conditions, including the approval of the Toronto Stock Exchange.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities in any jurisdiction.
The Debentures being offered, and the Common Shares issuable upon
the conversion or redemption of the Debentures, have not been and
will not be registered under the U.S. Securities Act of 1933 (the
"1933 Act") or state securities laws. Accordingly, the Debentures
may not be offered or sold to U.S. persons except pursuant to
applicable exemptions from the registration requirements of the
1933 Act and applicable state securities laws is available.
A preliminary short-form prospectus containing important
information relating to the Debentures has been filed with
securities regulatory authorities in each of the provinces and
territories of Canada. The
preliminary short-form prospectus is subject to completion or
amendment. Copies of the preliminary short-form prospectus may be
obtained from Scotia Capital Inc.: 40 King Street W, Toronto, Ontario, M5H 3Y2; (e-mail:
equityprospectus@scotiabank.com). A copy of the preliminary
short-form prospectus can also be obtained under Cineplex's
corporate profile on SEDAR at www.sedar.com. There will not be any
sale or any acceptance of an offer to buy the Debentures until a
receipt for the final short-form prospectus has been issued.
Caution Regarding Forward Looking Statements
Certain information included in this news release contains
forward-looking statements within the meaning of applicable
securities laws. These forward-looking statements include,
among others, statements with respect to Cineplex's objectives,
goals and strategies to achieve those objectives and goals, as well
as statements with respect to Cineplex's beliefs, plans,
objectives, expectations, anticipations, estimates and
intentions. The words "may", "will", "could", "should",
"would", "suspect", "outlook", "believe", "plan", "anticipate",
"estimate", "expect", "intend", "forecast", "objective" and
"continue" (or the negative thereof), and words and expressions of
similar import, are intended to identify forward-looking
statements.
By their very nature, forward-looking statements involve
inherent risks and uncertainties, including those described in
Cineplex's Annual Information Form ("AIF"), its management
discussion and analysis ("MD&A") for the year ended
December 31, 2019 and for the three
months ended March 31, 2020 and its
preliminary short form prospectus dated July
7, 2020 filed in connection with the Offering. Those risks
and uncertainties, both general and specific, give rise to the
possibility that predictions, forecasts, projections and other
forward-looking statements will not be achieved. Certain material
factors or assumptions are applied in making forward-looking
statements and actual results may differ materially from those
expressed or implied in such statements. Cineplex cautions readers
not to place undue reliance on these statements, as a number of
important factors, many of which are beyond Cineplex's control,
could cause actual results to differ materially from the beliefs,
plans, objectives, expectations, anticipations, estimates and
intentions expressed in such forward-looking statements. These
factors include, but are not limited to, the anticipated completion
of the Offering, the use of proceeds from the Offering, the
duration and impact of the COVID-19 pandemic on Cineplex, the movie
exhibition industry and the economy in general, as well as
Cineplex's response to the COVID-19 pandemic as it relates to the
closure of its theatres and location-based entertainment venues,
employee reductions and other cost- cutting initiatives, and
increased expenses relating to safety measures taken at its
facilities to protect the health and well-being of customers and
employees; Cineplex's expectations with respect to liquidity and
capital expenditures, including its ability to meet its ongoing
capital, operating and other obligations, and anticipated needs
for, and sources of, funds; Cineplex's ability to execute
cost-cutting and revenue enhancement initiatives in response to the
COVID-19 pandemic; risks generally encountered in the relevant
industry, competition, customer, legal, taxation and accounting
matters; the outcome of any litigation surrounding the termination
of the Cineworld transaction; and diversion of management time on
litigation related to the Cineworld transaction.
The foregoing list of factors that may affect future results is
not exhaustive. When reviewing Cineplex's forward-looking
statements, readers should carefully consider the foregoing factors
and other uncertainties and potential events. Additional
information about factors that may cause actual results to differ
materially from expectations and about material factors or
assumptions applied in making forward-looking statements may be
found in the "Risks and Uncertainties" section of Cineplex's AIF
and MD&A and the "Risk Factors" section of its preliminary
short form prospectus dated July 7,
2020.
Cineplex does not undertake to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable
Canadian securities law. Additionally, we undertake no obligation
to comment on analyses, expectations or statements made by third
parties in respect of Cineplex, its financial or operating results
or its securities. All forward-looking statements in this news
release are made as of the date hereof and are qualified by these
cautionary statements. Additional information, including Cineplex's
AIF and MD&A, can be found on SEDAR at www.sedar.com.
About Cineplex
Cineplex (TSX: CGX) is a top-tier
Canadian brand that operates in the film entertainment and content,
amusement and leisure, and media sectors. As a leading
entertainment and media company, Cineplex welcomes millions of
guests annually through its circuit of theatres and location-based
entertainment ("LBE") venues across the country. In addition to
being Canada's largest and most
innovative film exhibitor, Cineplex also operates successful
businesses in digital commerce (CineplexStore.com), food service,
alternative programming (Cineplex Events), cinema media (Cineplex
Media), digital place-based media (Cineplex Digital Media "CDM")
and amusement solutions (Player One Amusement Group "P1AG").
Additionally, Cineplex operates an LBE business through
Canada's newest destinations for
'Eats & Entertainment' (The Rec Room), and entertainment
complexes specifically designed for teens and families (Playdium).
Cineplex is a joint venture partner in SCENE, Canada's largest entertainment loyalty
program.
Proudly recognized as having one of the country's Most Admired
Corporate Cultures, Cineplex employs approximately 13,000 people in
its offices across Canada and
the United States. To learn more
visit Cineplex.com or download the Cineplex App.
SOURCE Cineplex