Cineworld, a leading cinema operator, is reportedly making plans to close several of its locations in the UK as part of a comprehensive restructuring effort. The company, which was previously listed on the London Stock Exchange, is considering shutting down approximately 25% of its roughly 100 British multiplexes. In addition, Cineworld is seeking to renegotiate rent agreements at 50 additional sites while leaving 25 locations untouched.
Sources familiar with the matter have informed that these proposed actions will be formally communicated to creditors, including landlords, in the coming weeks. It is understood that Cineworld will employ a restructuring plan rather than a company voluntary arrangement (CVA) as its insolvency mechanism. In response to queries, a spokesperson for Cineworld stated that while the company is continuously reviewing its options, it does not comment on rumors or speculations.
Last month, it was reported that Cineworld was in preliminary discussions with potential buyers, after which it moved forward with a formal restructuring process. The company has appointed AlixPartners to advise it on this process. It is expected that other cinema operators will step in to take over some of Cineworld’s sites if a sufficient number of landlords refuse to accept the proposed terms.
Cineworld operates more than 100 locations in the UK, including the Picturehouse chain, and has a sizable workforce. However, the company’s public relations advisor has declined to confirm the exact number of employees. The company’s growth under the leadership of the Greidinger family has made it a global industry giant, with significant acquisitions such as Regal in the US in 2018 and the UK-based company of the same name four years prior. However, the company’s heavy debt burden led it into crisis, resulting in its filing for Chapter 11 bankruptcy protection in 2022. In August of last year, Cineworld delisted from the London Stock Exchange as its share price plummeted, sparking concerns about its survival. In a deal struck last year, several billion dollars of debt were converted into shares, and a group of hedge funds and other investors injected a substantial sum of new capital into the company.
Cineworld also operates in central and Eastern Europe, Israel, and the US. Following its emergence from bankruptcy protection, the company appointed a new leadership team, with Eduardo Acuna, formerly of Mexican cinema chain Cinepolis, taking over as CEO and Eric Foss, a former Pepsi executive, being appointed as chairman. Some highly anticipated summer film releases in the UK include Despicable Me 4, A Quiet Place: Part One, and Alien: Romulus.
