After emerging from bankruptcy in the U.S. last summer, Regal parent Cineworld is now considering various options for its UK business. This could potentially include a sale or restructuring, according to a report by Sky News over the weekend. The world’s second-largest cinema operator has enlisted AlixPartners as a consultant, the same firm that helped its lenders navigate through bankruptcy.
Potential Process
City sources have revealed that the sale process is expected to take several weeks. Cineworld may also explore the option of a company voluntary arrangement as a further step in its restructuring process. This could mean that an unspecified number of UK cinemas under Cineworld’s umbrella are at risk of closure.
In response to inquiries, a spokesperson for Cineworld stated, “Like many businesses, we are continually reviewing our UK operations.” Cineworld’s bankruptcy in the U.S. in 2022 was a result of the impact of Covid-19 and accumulated debt. The company emerged from bankruptcy last August. Around the same time, the UK public company was delisted, leaving lenders in control. Eduardo Acuna was appointed as the new CEO at that time.
During the U.S. bankruptcy process last year, Cineworld decided to stop seeking buyers for its businesses in the U.S., UK, and Ireland unless an all-cash bid significantly exceeding the established value was made. It also halted the marketing process for its businesses in other markets. As a private company, Cineworld does not publicly report its earnings. However, Acuna mentioned in late February that the company performed better financially than expected in the previous year.
Acuna expressed optimism about the future, stating, “We are set up for success in 2025 and 2026… in a couple of years, we’ll be playing offense, not defense.” Despite the challenges faced by the exhibition industry due to Covid-19 and Hollywood strikes, Cineworld is working towards stabilizing its operations and preparing for a more successful future.