© Reuters. FILE PHOTO: People enter a Cineworld cinema following the outbreak of the coronavirus disease near Manchester, Britain, October 4, 2020. REUTERS/Phil Noble
(Reuters) -Cineworld, the world’s second-largest movie theatre operator, said it will pay $170 million to Regal Entertainment shareholders, who were disgruntled with the price they received when the London-listed company took over the U.S. chain in 2017.
According to an agreement, $92 million will be held in escrow and be available to Cineworld as additional liquidity under certain circumstances for the payment, Cineworld said on Friday.
The company, with a debt load of $8.44 billion compared to its market value of about $1.19 billion, has taken a hammering since the onset of the pandemic, which saw it burn through cash as cinemas were shut for long periods due to restrictions.
Cineworld included $244.2 million in its last annual report, which it said represented the amount payable to a group of Regal’s former stakeholders who had challenged whether they received a fair market price for their shares.
The company had said the claim was without merit, backing the $23 per Regal share it paid for the $3.6 billion purchase that positioned it as a top competitor to U.S.-listed AMC Entertainment (NYSE:) Holdings Inc.
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Read More: Cineworld pays $170 million to Regal investors unhappy with 2017