Huge cinema chain gives update on future after falling into bankruptcy last September
CINEWORLD has issued a big update on its future after announcing it would be filing for bankruptcy last year.
Cineworld owns the Picturehouse chain in the UK and Regal Cinemas in the US.
The cinema giant said today that it has been approached by a “number of” potential suitors.
However, none of them were willing to pay in cash to buy the whole business which is currently in £5billion of debt.
This means that any deal to save the business could result in its shareholders being wiped out.
It currently has 128 cinemas in the UK and Ireland which have been at risk – though they do remain open for now.
Landlords and debt holders would have to vote in favour of a deal to allow theatres to shut and reduce its rent bill, keeping the rest of the business alive.
However, it’s most likely that a different process known as an equity swap would be considered to save the chain.
This means the owners of the cinema chain’s debts end up owning the business while the investors who bought its listed shares will end up with nothing.
If this scenario happens, customers who have a membership pass are likely to have their credits honoured.
Those with a membership card pay from £9.99 a month to see films anytime they like as often as they want.
Cineworld did say it hopes to recover from bankruptcy protection before the middle of 2023.
It said: “The company has now received non-binding proposals from a number of potential transaction counterparties for some or all of the group’s business.
“The company is reviewing such proposals in conjunction with its advisers and key stakeholders and, whilst no decision has been made as to whether to pursue a sale transaction, and the terms of any such transaction remain uncertain, based on the proposals received to date, it is not expected that any sale transaction will provide any recovery for the holders of the company’s equity interests.”
Cineworld fell into bankruptcy last Autumn, putting 128 of its cinemas at risk.
It made the decision after struggling with attendance following the coronavirus pandemic, according to the Wall Street Journal.
At the time, the company hired lawyers and consultants to advise on the bankruptcy process.
It comes as a number of popular companies have gone into administration recently.
From the Scottish clothing brand M&Co to wellies store Joules, a number of familiar brands went bust in 2022.
Major burger chain Byron Burger also recently fell into administration and is set to close nine restaurants immediately.
Further popular chains including Las Iguanas, Cafe Rouge and Bella Italia also fell victim to the pandemic.
In December 2022, pub chain Wetherspoons announced it would be closing a total of 39 pubs after being hit by soaring inflation.
Here, The Sun has put together a full list of retailers that closed last year.
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