The multiplex giant is working with AlixPartners on options for its UK operations that could lead to a sale or restructuring, such as a company voluntary arrangement, Sky News has learned.
One of Britain’s largest cinema chains is in secret talks about a sale as part of a strategic review that could lead to a major restructuring of its operations.
Sky News has learned that Cineworld, whose parent company went through a series of insolvency processes last year, is working with advisers on a possible sale of its UK operations.
Cineworld, which trades from more than 100 locations in Britain and employs thousands of people, has started contacting potential bidders in recent days.
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AlixPartners, the restructuring adviser who handled the administration of Cineworld’s London-listed holding company last year, has been brought in to work on the process.
City sources said this weekend that the sale process was expected to take several weeks.
However, they added that the cinema giant was also expected to explore the option of a company voluntary arrangement (CVA) – a further restructuring process that would put an unspecified number of its UK cinemas at risk of closure.
A Cineworld spokesman at PR consultant Hill & Knowlton said he declined to provide information about the many locations the company operated in Britain or the size of its workforce.
In a statement to Sky News, he said: “Like many other companies, we are continually reviewing our UK operations.”
Cineworld grew into a global industry giant under the leadership of the Greidinger family, acquiring chains in 2018, including Regal in the US and the British company of the same name four years earlier.
However, the billions of dollars in debt led to a crisis and forced the company into Chapter 11 bankruptcy protection in 2022.
Last August, the company was delisted from the London Stock Exchange after seeing its share price collapse amid fears for its survival.
Under the deal that ensured its survival, billions of dollars of debt were exchanged for equity, with a significant amount of new money injected into the company by a group of hedge funds and other investors.
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Cineworld is also active in Central and Eastern Europe, Israel and the US.
According to insiders, the sale process only concerns the British activities.
It was unclear whether Picturehouse, which also owns Cineworld, would also be part of the auction.
A number of financial investors are expected to explore offers for Cineworld’s UK operations, while rival Vue is also likely to assess whether a bid would be feasible.
Last year, Sky News revealed that Vue had gathered support for a takeover of Cineworld but was excluded from a process that was ultimately abandoned.
Vue itself has undergone some financial restructuring, but its balance sheet is now on a sustainable footing after absorbing the twin shocks of the pandemic and the Hollywood writers’ strike.
Since emerging from bankruptcy protection, Cineworld has appointed a new leadership team, with Eduardo Acuna, who led Mexican cinema chain Cinepolis’ operations in the Americas, as CEO.
Eric Foss, a former Pepsi executive, was appointed chairman of Cineworld.
A property industry source said any attempt by Cineworld to implement a CVA or other restructuring that would put landlords at risk would likely be met with fierce resistance.
Major summer film releases in the UK include Despicable Me 4, A Quiet Place: Part One and Alien: Romulus.