Cineworld, one of the world’s leading cinema operators, is set to announce a significant restructuring plan this Friday that will result in the closure of approximately 25 sites across the UK. This move is part of a sweeping overhaul that aims to reduce the company’s British footprint by at least a quarter.
According to sources familiar with the matter, around half a dozen Cineworld cinemas will immediately begin the closure process and shut their doors for the last time later this summer. The exact number of job losses is currently unknown, but sources suggest it could reach “hundreds”.
The company’s public relations advisers at Hill & Knowlton have failed to respond to requests for comment. However, it is understood that Cineworld has been in discussions with major commercial landlords, such as Landsec and Legal & General, about its restructuring plans.
In order for the proposed closures to take place, a majority of creditors will need to approve the plan. This includes seeking rent reductions at approximately 50 other sites. If approved, roughly 25 cinemas will remain unaffected.
While some landlords are reportedly considering opposing the plan, it is uncertain whether they have enough support to block it. Cineworld initially explored a potential sale of the business, but has since shifted its focus to a formal restructuring process. The company is being advised by AlixPartners.
Other cinema operators are expected to step in and take over some of Cineworld’s sites. The company currently operates more than 100 sites across the UK, including the popular Picturehouse chain. It also employs thousands of people, although the exact number has not been confirmed by its public relations adviser.
Cineworld, which is owned by the Greidinger family, has expanded globally in recent years through acquisitions, including the US-based Regal chain in 2018 and the British company of the same name in 2014. However, its heavy debt load has led to financial difficulties, ultimately leading to Chapter 11 bankruptcy protection in 2022.
Last August, the company delisted from the London Stock Exchange due to a significant drop in its share price. As part of its recovery plan, Cineworld underwent a debt-for-equity swap, with a group of hedge funds and other investors injecting new capital into the company.
Aside from its presence in the UK, Cineworld also operates in central and Eastern Europe, Israel, and the US. Since emerging from bankruptcy protection, the company has appointed a new leadership team, with Eduardo Acuna, former head of Mexican cinema chain Cinepolis’s operations in the Americas, taking on the role of chief executive.
As the summer movie season approaches, major film releases in the UK include highly-anticipated titles such as Despicable Me 4, A Quiet Place: Part One, and Alien: Romulus.
