Cineworld can’t find buyer for operations outside UK, US and Ireland as creditors set to take over
Cineworld will halt efforts to sell its business outside of the UK, US, and Ireland after it failed to find a buyer.
The London-listed firm — which filed for bankruptcy in the US last August — said that it had received offers for its “Rest of World” business but they “did not meet the value level required by the Group’s lenders.”
The news comes after the embattled cinema chain previously revealed that it would launch a new debt restructuring plan which would wipe out shareholders in a bid to reduce its $4.53bn (£3.68bn) debt pile and exit Chapter 11 insolvency in the first half of 2023.
The company was also forced to halt the sale process of its US, UK and Ireland businesses after it failed to find a buyer earlier this month.
The cinema operator announced it would be taken over by its creditors in a bid to restructure its debts and keep the struggling company afloat.
Cineworld — which has 127 branches in the UK and over 700 globally — was badly hit during the pandemic as theatres were shuttered.
The beleaguered chain has struggled to claw theatre-goers back to the big screen and has also faced competition from streaming services.
“This is a disappointing move for shareholders but the raising of much-needed funds to preserve the brand to the point it can rebuild is the best course of action,” said Jason Freedman, an insolvency partner at the law firm, Gowling WLG, of Cineworld’s latest announcement.
“It’s little surprise that potential suitors are not overly convinced of the business case ahead, given the shakeup of the movie industry and the might of the streaming giants, which is likely to mean ticket sales will never fully recover to the heady days of the past,” added Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Shares in Cineworld were up by over eight per cent on Monday morning.