Cineworld kicks off talks with landlords about closure plan
Landsec and Legal & General, which between them own about 30 Cineworld sites, are considering whether to support proposals for a radical restructuring of the chain, Sky News understands.
Tuesday 16 July 2024 12:40, UK
Cineworld has opened talks with some of Britain's biggest commercial landlords about its plans to axe up to a quarter of its British cinema estate.
Sky News understands that property owners including Landsec and Legal & General, which between them own about 30 Cineworld multiplexes, are engaged in active discussions with the company about a looming restructuring plan.
City sources said a date had been set for a hearing at which a majority of creditors would need to approve the cinema operator's proposals to close about 25 sites, with rent reductions being sought at a further 50.
A number of landlords are said to be considering opposing the proposals, although it is unclear whether that would be in sufficient number to block the restructuring plan.
The remaining 25 would be left untouched by the restructuring, Sky News reported earlier this month.
Cineworld initially held talks about a sale of the business with prospective buyers, but has now switched its focus to a formal restructuring process.
The company is being advised by AlixPartners.
Other cinema operators are expected to step in to take over some of Cineworld's sites if a sufficient number of landlords refuse to agree to the proposed terms.
The company trades from more than 100 sites in Britain, including at the Picturehouse chain, and employs thousands of people, although its public relations adviser has refused to confirm either figure.
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Tap hereCineworld grew under the leadership of the Greidinger family into a global giant of the industry, acquiring chains including Regal in the US in 2018 and the British company of the same name four years earlier.
Its multibillion dollar debt mountain led it into crisis, though, and forced the company into Chapter 11 bankruptcy protection in 2022.
It delisted from the London Stock Exchange last August, having seen its share price collapse amid fears for its survival.
Under the deal struck last year, several billion dollars of debt were exchanged for shares, with a significant sum of new money injected into the company by a group of hedge funds and other investors.
Cineworld also operates in central and Eastern Europe, Israel and the US.
Since it emerged from bankruptcy protection, Cineworld has appointed a new leadership team, installing Eduardo Acuna, who ran Mexican cinema chain Cinepolis's operations in the Americas, as its chief executive.
Major summer film releases in Britain include Despicable Me 4, A Quiet Place: Part One, and Alien: Romulus.
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Landsec and L&G declined to comment.