British Land weighs opposition to Cineworld restructuring | Business News

British Land is considering voting against a restructuring of Cineworld’s UK operations that could lead to the closure of dozens of sites.

Sky News understands that British Land, one of Britain’s biggest commercial property companies, is among a number of landlords unhappy with the formal proposals put forward by the cinema giant.

Cineworld has confirmed plans for close six of its multiplexes in the UKBut documents distributed to creditors show that almost 50 others are in categories that require landlords to agree to revised lease arrangements in order to ensure their long-term viability.

Property industry sources said several Cineworld owners were unhappy with the proposals currently set up and expected to push for improved terms.

British Land, which reportedly owns four Cineworld sites, three of which would be compromised by the plan, declined to comment.

Last month, Sky News reported that Landsec and Legal & General were among Cineworld’s biggest UK owners, although it was unclear on Wednesday how they planned to vote on the restructuring.

According to documents sent to creditors, 33 sites – categorized as Class B – “require rent reduction for ERV [Estimated Rental Value] Rent to put the land in a viable long-term situation.”

A further 38 Cineworld cinemas would be unaffected, while a further 16 class C1 and C2 leases require turnover rent reductions or zero rent in order to make them financially viable.

They added that the company did not have enough funding to pay a quarterly rent bill on June 24 of £15.9m.

“The UK group did not have sufficient liquidity to make the June 2024 rent payment and required additional funding from the US group to meet this liquidity need.

“In the absence of this funding, the UK Group would have been insolvent in terms of cash flow.”

A convening hearing has been scheduled to move forward with the restructuring plan later this month.

Cineworld said in a statement: “We anticipate that six cinemas will close as part of our Restructuring Plan.

“With the support of our owners, the plan will allow us to provide a cost base that supports a long-term sustainable business serving the public across the remainder of our property.”

Cineworld initially held talks about selling the business with potential buyers, but shifted its focus to a formal negotiation restructuring process.

The company is being advised by AlixPartners.

Other cinema operators are set to step in to take control of some Cineworld sites.

The company trades from more than 100 locations across Britain, including the Picturehouse chain, and employs thousands of people.

Cineworld grew under the leadership of the Greidinger family and became a global industry giant, acquiring chains such as Regal in the US in 2018 and the British company of the same name four years earlier.

However, its multibillion-dollar mountain of debt led it into crisis and forced the company to enter Chapter 11 bankruptcy protection in 2022.

It left the London Stock Exchange last August, after seeing its share price fall due to fears for its survival.

Under the deal reached last year, several billion dollars of debt was swapped for equity, with a significant sum of new money injected into the company by a group of hedge funds and other investors.

Cineworld also operates in Central and Eastern Europe, Israel and the USA.

Major summer film releases in Britain include Despicable Me 4, A Quiet Place: Part One and Alien: Romulus.