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On Friday, IPic Entertainment warned investors that it was facing a lack of cash that could push the movie chain to chapter 11.
In public documents, the company stated that it was unable to secure the necessary funds to pay a $ 10.1 million interest payment to the Alabama Pension Plan (RSA) and the Alabama Teachers Retirement System. The theatrical circuit stated that it had incurred approximately $ 204 million in debt from the pension fund under a credit facility.
"We do not have sufficient cash or other badets available to repay our debt and the RSA could seize the pledged property to secure the credit facility, which includes substantially all of our badets," warned investors. . "If we are unable to restructure our debt, including our RSA credit facility, our significant debt and lack of liquidity will have a material adverse effect on our business, prospects, financial condition and ability to continue." our activities. "
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IPic stated that RSA had not informed her that the exhibitor was in default despite the fact that he had missed an interest payment due on 1 July. IPic stated in the filing that it had $ 2.2 million in cash.
A spokesperson for RSA and iPic did not immediately respond to a request for comment. IPIC shares closed at just over $ 2 on Friday, up 4.10%.
IPic, which currently operates 123 screens at 16 locations, including California, Arizona, Florida and New York, was founded in 2006 by Hamid Hashemi to provide a luxury experience for moviegoers. With ticket prices of up to $ 30, iPic customers can watch movies from reclining seats while ordering upscale dishes and badtails.
IPic is also notable for its links to Netflix, as it was the first channel to watch the company's original movies the same day they were available to subscribers. For years, Netflix has faced contentious hurdles in its attempts to reduce the theatrical window, a 90-day period in which movie theaters require movies before moving on to spaces such as paid rentals and video streaming. the demand. The iPic deal was also a crucial factor in helping Netflix get into the rewards race as the Oscars forced a small theatrical series to qualify.
In its latest quarterly report, however, the company warned investors that it needed to find new capital or find a way to restructure its debt. To this end, he stated that he hired financial and legal advisers to examine strategies to resolve his liquidity problems.
"We can choose to implement a restructuring or a strategic alternative via Chapter 11 in order to obtain court approval of such transactions and to facilitate the approval of stakeholders necessary for the implementation. such transactions. Otherwise, it might be necessary to seek protection under Chapter 11., "reads the company's filing.
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