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Cineplex Inc
Symbol CGX
Shares Issued 63,333,238
Close 2020-07-07 C$ 7.92
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Cineplex arranges $275M debenture offering

2020-07-07 14:45 ET - News Release

An anonymous director reports

CINEPLEX ANNOUNCES OFFERING OF CONVERTIBLE DEBENTURES

Cineplex Inc. has filed a preliminary short-form prospectus in connection with a marketed public offering of convertible unsecured subordinated 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 overallotment option to purchase up to an additional 15 per cent of the debentures to be sold pursuant to the offering. The overallotment 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 Sept. 30, 2025, and will bear interest at the rate determined at the time of pricing, payable semi-annually in arrears on Sept. 30 and March 31 in each year, commencing on Sept. 30, 2020. At the holder's option, the debentures may be converted into common shares of the company 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 Sept. 30, 2023. On or after Sept. 30, 2023, and prior to Sept. 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 per cent of the conversion price. On or after Sept. 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.

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.

About Cineplex Inc.

Cineplex 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 venues across the country.

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