Cineworld drops sale of UK and US businesses after failing to find buyer - what’s next for cinema chain?
Cineworld has been dealt a double blow in recent years after its cinemas were forced to close during the lockdowns and streaming services such as Netflix soared in popularity.
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Cineworld has dropped plans to sell its businesses in the UK and Ireland as well as the US after failing to secure a buyer. The troubled cinema chain said it had reached a conditional deal with lenders to exit bankruptcy with plans to raise $2.26bn (£1.8bn) of new funding.
Cineworld, which owns the Picturehouse chain in the UK, filed for US bankruptcy protection last year as the company grappled with $5bn of debt. Chief executive Mooky Greidinger said the agreement reached with lenders represented a “vote of confidence” and “significantly advances Cineworld towards achieving its long term strategy”.
The financial restructuring programme announced today (Monday, April 3) will involve lenders providing around $1.46bn (£1.2bn) in new credit, as well as $800m (£651m) of equity to the lenders. Meanwhile the London-listed company, which has seen its shares fall by almost 99% in the past five years, will continue to trade “as usual”.
Cineworld is the second largest cinema chain in the world with more than 9,000 screens operating in almost 750 locations across 10 countries including the UK, the US, Israel and Poland. The firm currently employs around 30,000 people worldwide.
But the company has struggled to recover from the pandemic during which cinema chains were badly hit, with many forced to close for extended periods during the lockdowns. Cinemas have also come up against tough competition from streaming services which soared in popularity during the pandemic.
Cinemas do continue to see larger audiences drawn in by the latest Hollywood blockbusters since restrictions eased, with big box office hits in recent months including Top Gun: Maverick and Avatar: Way of the Water.
Mr Greidinger added: "With a growing slate of blockbusters and audiences returning to cinemas in increasing numbers, Cineworld is poised to continue offering movie goers the most immersive cinema experiences and maintain its position as the ‘best place to watch a movie’."