Cineworld in talks to axe a quarter of UK sites two years after debt crisis
Cineworld may axe around a quarter of its cinemas in the UK as it reportedly kicks off talks with landlords about a plan for closure.
Landsec and Legal & General, which between them own around a third of Cineworld’s sites, are in discussions with the company about a huge restructuring plan, Mark Kleinman’s of Sky News said today.
The chain is seeking rent reductions at a further fifty of its hundred complexes, city sources told the news outlet, meaning that three quarters of its cinemas are at risk if landlords do not agree to the plan.
Cineworld first ran into trouble in 2022, when a share price collapse in light of a debt crisis led it to de-list from the London Stock Exchange.
In September 2022, the firm filed for bankruptcy in the US after lockdowns on both sides of the Atlantic left it in a tricky financial situation.
It struck a debt restructuring deal with investors in which billions of pounds of debt were traded into shares and a significant amount of money was injected into the company.
Despite the cash and a new leadership team, it now faces a similar crisis less than two years later.
Cineworld initially considered a sale of the business and was reported to hold initial talks with prospective buyers , but switched to a restructuring plan.
The news today is a formal presentation of rumours which were swirling around Cineworld a few weeks ago.
Despite its status as the world’s second-largest cinema chain, Cineworld was hit hard by the Covid pandemic, when many of its theatres were forced to close.
Cineworld has more than 28,000 staff across 751 sites globally – including at the Picturehouse chain – with 128 locations in the UK and Ireland.
Other cinema operators are expected to step in to take over some of Cineworld’s sites if landlords refuse to reduce rent on the properties, Sky understands.
“We’re aware of the speculation around Cineworld’s future, and can’t comment on individual brands. However, we believe strongly in the future of physical retail, and the important role that leisure attractions play in the retail mix” a spokesperson from Landsec said.
“Our focus is on creating the very best experiences in the right locations, that attract guests from further for longer,” they added.
A spokesperson for Cineworld said: “We continue to review our options, but we don’t comment on rumours and speculation.”
L&G declined to comment.