- Cineworld will file for administration for its London-listed company in July.
- The move is part of a restructuring plan for the world’s second-largest cinema chain that will see its shares being suspended.
- The company filed for bankruptcy protection in the US last year as it struggled with debts of $5bn.
- Screens will remain open and will operate as usual through the process but it’s unlikely the UK footprint will escape closures
- The chain is set to exit bankruptcy in the US next month.
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
‘’Cineworld has turned escapologist as it plans to squeeze itself out of a financial blackhole by keeping cinemas open as it files for administration. It’s going to remain in business while it re-organises its debts and assets to embark on a new chapter. But it heralds a total wipe-out for shareholders, while lenders pour in fresh funds in return for ownership of the reorganised entity.
This is the last gut-wrenching turn in what’s been a pandemic rollercoaster for Cineworld shareholders. Covid hit the company hard, with movie theatres locked up around the world, and the re-opening failed to provide the thrust needed to emerge back into profitability, with blockbuster sales failing to chip away at the debt mountain the company had built up.
Although its big brands around the world – Regal, Picturehouse, Cinema City and Planet – will keep operating through the administration process here, and bankruptcy proceedings in the US, Cineworld is set emerge as a dramatically slimmed down player in the movie world. More Regal movie theatres began closing in the US earlier this year, with the company trying to escape from 130 leases and it seems unlikely that its footprint of 129 cinemas across the UK will escape restructure indefinitely. Given the shakeup of the movie industry and the might of the streaming giants, ticket sales will never fully recover to the heady days of the past, so focusing on the improving experience for die hard movie fans in a smaller number of more theatres is likely to the focus, to boost margins and increase ancillary spend.’’
