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Shareholders of Lionsgate Studios Corp. (NASDAQ:LION), a $1.94 billion market cap company specializing in motion picture and video tape production, have given a green light to significant corporate reorganization plans, according to a recent SEC filing. The company, which generated $3 billion in revenue over the last twelve months, has been seeking to optimize its structure amid challenging market conditions, with its stock down nearly 38% over the past year. The approval came during a Special Meeting held on Tuesday, where a majority of the common shares were represented in person or by proxy.
The reorganization proposal, which received a near-unanimous approval with 99.99% of the votes in favor, is part of a statutory Plan of Arrangement under Section 288 of the Business Corporations Act (British Columbia). This is expected to lead to a restructured entity known as New Lionsgate, involving Lionsgate Studios and its shareholders, alongside Lionsgate Studios Holding Corp. According to InvestingPro data, this restructuring comes at a crucial time as the company operates with a significant debt burden of $3.86 billion and a concerning current ratio of 0.36.
Additionally, shareholders voted on advisory organizational documents proposals, which included changes to the authorized share capital and quorum requirements for New Lionsgate Articles. The proposal to include 200,000,000 preference shares without par value was approved with 95.58% in favor, while the reduction of quorum for shareholder meetings from 33 1/3% to 10% was also approved with a 97.19% majority.
These changes are in line with SEC guidance and are intended to affect shareholder rights significantly. The proposals are detailed in a definitive joint proxy statement/prospectus filed on March 14, 2025, with the transactions anticipated to be finalized around May 5, 2025.
The filing also included forward-looking statements, cautioning that actual future results could differ materially due to various factors such as changes in business strategy, the unpredictable commercial success of productions, and the impact of global economic conditions. Despite current challenges, InvestingPro analysis indicates that net income is expected to grow this year, with analysts projecting a return to profitability. For deeper insights into Lionsgate’s financial health and detailed valuation analysis, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Lionsgate Studios Corp. emphasized that the approval of these proposals is a crucial step towards the completion of the reorganization and restructuring process, setting the stage for the company’s future operations and governance. This information is based on a press release statement and the company’s recent SEC filing.
In other recent news, Lions Gate Entertainment Corp (NYSE:LGFa). reported impressive financial results for Q4 2024, with earnings per share (EPS) of $0.28, far exceeding the anticipated $0.07. The company’s revenue also surpassed expectations, reaching $970.5 million against a forecast of $753 million. In addition to strong earnings, Lionsgate shareholders approved a strategic plan to separate its film and television studio from the Starz network. This move is expected to streamline operations and allow each entity to focus on its strengths. Furthermore, Lionsgate Studios expanded its credit facility to $1 billion, enhancing its financial flexibility. The company also received a notice from Nasdaq regarding non-compliance with annual meeting requirements, with plans to address this by mid-2025. Meanwhile, Lionsgate announced a new exclusive pay deal with Amazon (NASDAQ:AMZN) Prime Video, which is expected to increase the contribution from their pay television window significantly. These developments highlight Lionsgate’s proactive approach in adapting to the evolving media landscape and strengthening its position in the market.
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