TORONTO, July 8, 2020 /CNW/ - Cineplex Inc. ("Cineplex" or
the "Company") (TSX: CGX) today announced that it has priced
its previously announced marketed public offering (the "Offering")
of convertible unsecured subordinated debentures (the
"Debentures"), for aggregate gross proceeds of $275 million.
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 an annual rate of 5.75%, payable semi-annually in
arrears on September 30 and
March 31 in each year, 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 of $10.94 per Common Share, being a conversion rate
of approximately 91.4077 Common Shares for each $1,000 principal amount of Debentures, subject to
adjustment in certain events.
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.
The Offering is expected to close on or about July 15, 2020, 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 final short-form prospectus containing important information
relating to the Debentures will be filed with securities regulatory
authorities in each of the provinces and territories of
Canada. Copies of the final
short-form prospectus, when available, may be obtained from Scotia
Capital Inc.: 40 King Street W, Toronto,
Ontario, M5H 3Y2; (e-mail: equityprospectus@scotiabank.com).
A copy of the final short-form prospectus, when available, 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