Herbert Smith has advised a new FTSE-listed client, Cineworld Group plc (Cineworld) on its recently concluded £170 million sterling term and multicurrency revolving facilities agreement.

Cineworld is the UK’s leading cinema operator with a market share of over 25%, and in 2010 it was the largest operator in terms of total box office revenue and admissions. The group has performed well in recent years despite challenging market conditions, and is focused on growth through increased provision of 3D films, alternative content (such as showing Six Nations rugby and the football World Cup in 3D) and providing venues for conferencing and other similar uses.

The financing was arranged as a “club” deal with a syndicate of seven relationship banks providing the facilities (including Barclays, Lloyds TSB, RBS and Bank of Ireland). The facilities are for a five-year term, and are intended to refinance the Cineworld group’s existing debt and to provide the group with flexibility to finance future acquisitions and other growth opportunities. 

The Herbert Smith team was led by finance partner Chris Fanner, assisted by Jagannath Iyer and Marc Davies. Dina Albagli (partner), Richard Philips (senior associate) and Joy Amis (associate) advised in connection with Cineworld’s hedging arrangements, and Perminder Gainda (senior associate) assisted on tax. 

Commenting on the deal, Chris Fanner said: 

“This transaction has presented Herbert Smith with a marvellous opportunity to build a relationship with a company which is a market leader in the media sector at an interesting stage in its development.”

Cineworld was also advised by Rothschild Debt Advisory and Arthur Cox in relation to its Irish law issues. The lenders were advised by Linklaters LLP with A&L Goodbody providing Irish law advice.