Cineworld was once a London Stock Exchange Listed company. That was until August last year where it de- listed after fears of its potential collapse. This came after it was forced into Chapter 11 bankruptcy protection in 2022 due to its multi-billion pound debt.
In an effort to revive the cinema chain, an agreement was made to inject billions of pounds in exchange of shares by hedge fund investors. Since then, it has appointed a number of new leadership individuals in a bid to improve its revenue. These included Eduardo Acuna as its new Chief Executive, who ran Mexican cinema chain ‘Cinepolis’, and ex-Pepsi executive, Eric Foss, to become Cineworld’s new chairman.
Despite its efforts, it appears that Cineworld is facing further concerns after entering a restructuring procedure, as was the preferred route over a Company Voluntary Arrangement (‘CVA’) by the company.
The restructuring plan is due to close roughly one quarter of its 100 locations in Britain, including those in the Picturehouse chain. Additionally, the company is due to negotiate significant rent cuts to 50 of its sites, leaving the remaining 25 locations untouched.
Cineworld appears to be the latest of cinema chains to face the effects of the rising popularity of streaming services and the on-going delays of over 60,000 SAG-AFTRA members (writers, producers and actors) and screenwriters who were striking from July 14th to September 26th, 2023.
AlixPartners are providing advice and guidance to Cineworld through their restructuring plan, with an announcement due to be made within the next few weeks as to the chain’s other plans and proposals to its other creditors about its next steps. This is as other cinema chains could be due to take over Cineworld’s sites should their landlord’s rent negotiations return as unsuccessful.
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