Cineworld Engages in Talks with British Landlords to Restructure Cinema Estate
Cineworld, a major cinema operator in Britain, has recently opened discussions with some of the country’s largest commercial landlords regarding its plans to close a quarter of its British cinema locations. According to sources familiar with the matter, property owners Landsec and Legal & General, who collectively own approximately 30 Cineworld multiplexes, are actively engaged in talks with the company over a potential restructuring plan.
City sources have revealed that a hearing has been scheduled where a majority of creditors will need to approve the proposed closure of about 25 sites, while rent reductions will be sought at an additional 50 locations. It is reported that some landlords are considering opposing the plan, although it remains unclear whether their numbers will be sufficient to block the restructuring.
Earlier this month, Sky News reported that the remaining 25 locations will remain untouched by the proposed restructuring. Initially, Cineworld had explored the possibility of selling the business, but has now shifted its focus to a formal restructuring process. The company has enlisted the services of AlixPartners to advise them in this matter.
If a significant number of landlords refuse to agree to the proposed terms, other cinema operators are expected to step in and take over some of Cineworld’s sites. The company currently operates over 100 locations in Britain, including the Picturehouse chain, and employs thousands of people. However, these figures have not been confirmed by Cineworld’s public relations advisor.
Under the leadership of the Greidinger family, Cineworld has grown into a global giant in the industry, acquiring chains such as Regal in the US in 2018 and the British company of the same name four years prior. However, the company’s significant debt burden has led it into crisis, resulting in its filing for Chapter 11 bankruptcy protection in 2022. Last August, Cineworld delisted from the London Stock Exchange as its share price plummeted amidst concerns about its survival.
As part of the deal struck last year, several billion dollars of debt were exchanged for shares, and a substantial sum of new capital was injected into the company by a group of hedge funds and other investors. In addition to its presence in Britain, Cineworld also operates in central and Eastern Europe, Israel, and the US.
Since emerging from bankruptcy protection, Cineworld 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. Upcoming major film releases in Britain, including Despicable Me 4, A Quiet Place: Part One, and Alien: Romulus, are expected to attract significant audiences this summer.
When approached for comment, both Landsec and Legal & General declined to provide a statement.
