Confirmation hearing for Loews Cineplex reorganization plan set for Feb. 28

New York, Jan. 14 - Loews Cineplex Entertainment Corp. said the Bankruptcy Court for the Southern District of New York at a hearing Monday set Feb. 28 as the date for the confirmation hearing on its reorganization plan.

Under Loews' reorganization plan, Canadian buyout firm Onex Corp. and partner Oaktree Capital Management LLC will take control of the company by swapping $300 million of bank debt in the theater chain for full equity ownership. A further $442 million of the chain's bank loans will be exchanged for $429 million in new notes. Unsecured creditors, including the junk bond holders, would receive about $45 million in cash, or about 10 cents on the dollar.

Loews also said in a filing with the Securities and Exchange Commission Monday that it has commitment letters for two new bank loans, a $100 million revolving credit facility and a $430 million term loan.

The $100 million revolver is exit financing for the emergence from Chapter 11. Proceeds will be used to repay the company's debtor-in-possession facility, for working capital and to pay bankruptcy costs and expenses.

The term loan is a restructuring of borrowings under its existing $1 billion senior revolving credit facility, according to the SEC filing. Loews said its bank lenders agreed to refinance 98.25% of the amount outstanding less at least $300 million of debt to be converted into equity of the reorganized company.

Loews also said it has a commitment for C$95 million of exit financing for the Canadian bankruptcy proceedings which will be used to repay the Canadian portion of the DIP facility, settle claims under the Canadian plan of arrangement and provide funds for working capital and general corporate purposes.

Closing and disposing of overlapping and underperforming theaters is continuing, Loews said. As of Nov. 30, 2001, the company said in the SEC filing, 77 theaters comprising 516 screens have been approved for rejection by the Bankruptcy Court in the U.S., 44 theaters comprising 254 screens have been repudiated in Canada and four leases have been terminated in Austria and Poland. More leases may be targeted for rejection or repudiation in the future, Loews said.

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