IRVING, Texas, Oct. 29, 2020 /PRNewswire/ -- CEC Entertainment, Inc. ("CEC" or the "Company"), a nationally recognized leader in family entertainment and dining, today announced that it has reached an agreement with the official committee of unsecured creditors (the "Committee") and the ad hoc group of unsecured noteholders holding greater than 50% in principal amount of the Company's prepetition 8% senior notes to support the Plan of Reorganization (the "Plan") and a value-maximizing transaction with the Company's first lien lenders. In accordance with the Plan Support Agreement ("PSA"), as amended and restated on October 21, 2020, and now supported by consenting creditors holding greater than 92% in principal amount of outstanding obligations under the Company's prepetition first lien credit agreement and greater than 80% in principal amount of the Company's prepetition 8% senior notes, first lien lenders will exchange their debt for equity in the reorganized Company.
Chuck E. Cheese and Peter Piper Pizza continue to serve guests, host birthday parties and events, and provide families with wholesome entertainment over great food in compliance with all applicable health and safety guidelines.
The principal terms of the debt-for-equity exchange transaction and the treatment of claims and interests are set forth in the Plan and accompanying disclosure statement available on the online docket of the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the "Bankruptcy Court") or at https://cases.primeclerk.com/cecentertainment/.
In addition, on October 13, the Bankruptcy Court approved $200 million in debtor-in-possession ("DIP") financing to support the Company's ongoing business operations and reorganization expenses.
The court approval of $200 million in DIP financing and the global consensus reached with a substantial majority of funded debt creditors and the Committee continues CEC's positive momentum and will further streamline the restructuring process as the Company seeks to emerge from Chapter 11.
"This is an exciting milestone in our Chapter 11 cases and demonstrates significant positive momentum as we work to position CEC Entertainment for long-term success," said David McKillips, CEC's Chief Executive Officer. "Our goal from the outset of the Chapter 11 process was to pursue a value-maximizing transaction that will allow us to emerge from bankruptcy protection with a strengthened financial structure and able to fully implement our strategic plan, and we are confident we will achieve those goals with this agreement with our first lien lenders and support from our key stakeholders. We look forward to completing our restructuring process and working toward a timely emergence."
As of October 28, 346 company-operated Chuck E. Cheese and Peter Piper Pizza restaurant and arcade venues are safely reopened in accordance with all CDC, federal, state, and local guidelines as they work to serve guests and host birthday parties and events. A list of open locations and services provided can be found on https://www.chuckecheese.com/reopening-directory and https://www.peterpiperpizza.com/locations. The Company plans to continue opening additional locations as it is safe to do so, steadily bringing more employees back to work and providing families with wholesome entertainment over great food.
Weil, Gotshal & Manges LLP is serving as legal counsel, PJT Partners is serving as investment banker, FTI Consulting is serving as financial advisor, and Hilco Real Estate is serving as real estate consultant to CEC in connection with the Company's Chapter 11 cases.
This press release includes statements that may constitute "forward-looking statements" that are not historical facts, including statements about the beliefs, expectations, estimates, future plans, and strategies of CEC including, but not limited to, statements about the Chapter 11 cases and the Company's ability to continue operating in the ordinary course while the Chapter 11 cases are pending. These statements are based on current expectations and assumptions, which management believes are reasonable, and on information currently available to management, but are necessarily subject to various risks and uncertainties. In addition to the risk that these assumptions prove to be inaccurate, factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include factors disclosed in CEC's annual report on Form 10-K, as amended, for the year ended December 29, 2019, and subsequent reports filed with the Securities and Exchange Commission (the "SEC"), which are available on CEC's website at https://cecentertainment.gcs-web.com/investor-overview and on the SEC website at www.sec.gov. Additional factors include, but are not limited to, those associated with the Chapter 11 cases commenced on June 24, 2020 and those associated with the COVID-19 global pandemic. CEC undertakes no obligation to publicly update or revise any forward-looking statements, whether due to new information, future events or otherwise, except to the extent required by law.
About the Company
CEC Entertainment, Inc. is a nationally recognized leader in family dining and entertainment with both its Chuck E. Cheese and Peter Piper Pizza restaurants. As the place where a million happy birthdays are celebrated every year, Chuck E. Cheese's goal is to create positive, lifelong memories for families through fun, food, and play and is the place Where A Kid Can Be A Kid®. Committed to providing a fun, safe environment, Chuck E. Cheese helps protect families through industry-leading programs such as Kid Check®. As a strong advocate for its local communities, Chuck E. Cheese has donated more than $16 million to schools through its fundraising programs and supports its national charity partner, Boys and Girls Clubs of America. Peter Piper Pizza features dining, entertainment and carryout with a neighborhood pizzeria feel and "pizza made fresh, families made happy" culture. Peter Piper Pizza takes pride in delivering quality food and fun that reconnects family and friends. With a bold design and contemporary layout, an open kitchen revealing much of their handcrafted food preparation, the latest technology and games, and beer and wine for adults, Peter Piper Pizza restaurants appeal to parents and kids alike. The Company and its franchisees operate a system of 568 Chuck E. Cheese and 122 Peter Piper Pizza venues, with locations in 47 states and 15 foreign countries and territories. For more information, visit chuckecheese.com and peterpiperpizza.com.
For CEC Entertainment, Inc.
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SOURCE CEC Entertainment, Inc.