Cinedigm Borrows $195M for Further Expansion of Digital Cinemas

Cinedigm has refinanced its loans for greater financial flexibility

Cinedigm has refinanced its loans through a pair of newly closed credit facilities worth a combined $195 million, the company announced on Friday. The loans are now at a lower interest rate and offer more flexibility to spend in the future.

Both loans are in the form of non-recourse credit facility, whereby a company pledges collateral but is not liable beyond that collateral. Cinedigm will pay off the loans using “virtual print fees,” a fee that studios agree to pay every time a movie plays in a digital theater. The money has been used to spread digital projectors nationwide.

Societe General Corporate & Investment Banking led the first facility, worth $125 million. Prospect Capital Corporation provided the second facility, worth $70 million.

Cinedigm will use the money to pay for the installation of more digital cinema systems in North American theaters.

 “This refinancing is a significant step in our progress towards strengthening Cinedigm's balance sheet,” Adam Mizel, COO and CFO of Cinedgim, said in statement.  “By lowering our cost of capital, extending our mezzanine debt maturity to 2021 and shifting all of our debt to be secured only by our deployment businesses, we have improved our capital flexibility, unlocked equity value and simplified our story.”