CEC Entertainment — parent company of Chuck E. Cheese, Peter Piper Pizza and new Pasqually’s Pizza & Wings virtual brand — has received $200 million of debtor in possession financing from its first lien lenders to be used in order to climb out of bankruptcy declared in June. The financing will go toward supporting reorganization and operational expenses as the company seeks to emerge from Chapter 11.
“We are pleased to have reached agreement with a substantial majority of our first lien lenders on a comprehensive balance sheet restructuring that will support our re-opening and longer-term strategic plans,” David McKillips, CEC’s CEO, said in a statement. “This agreement and financing demonstrate our creditors’ confidence in our go-forward business plan and will enable CEC to complete this financial restructuring process in a timely manner.”
The company filed for voluntary Chapter 11 bankruptcy protection in United States Bankruptcy Court for the Southern District of Texas to “overcome the financial strain” of pandemic-related closures. The Wall Street Journal first reported in June that CEC Entertainment was seeking a $200 million loan to finance their bankruptcy restructuring.
As per the bankruptcy filing, the company will continue its restaurant operations as normal, including birthday parties and other family entertainment events. The financial restructuring of the company during the period of Chapter 11 is based on a plan to sell its reorganized equity or all of its assets, a sale of all of its assets to lenders or a debt for equity exchange.
CEC Entertainment is continuing to consider interest from third parties for the sale of the company, though no official announcement has been made yet.
As of Sept. 4, 316 company-operated Chuck E. Cheese and Peter Piper Pizza venues have reopened.
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