One of Britain’s biggest cinema chains is in secret talks about a sale as part of a strategic review that could lead to a complete restructuring of its business.
Sky News understands that Cineworld, whose parent company went through a series of insolvency proceedings last year, is working with consultants on a potential divestiture of its UK operations.
Cineworld, which trades from more than 100 sites across Britain and employs thousands of people, began contacting potential bidders in recent days.
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AlixPartners, the restructuring consultant who managed London-listed Cineworld’s 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 last several weeks.
They added, however, that the cinema giant was expected to also explore the option of a company voluntary arrangement (CVA) – a further restructuring process that could put an unspecified number of its UK cinemas at risk of closure.
A spokesperson for Cineworld from its public relations consultant, Hill & Knowlton, said it declined to provide information about the many sites the company operated in the UK or the size of its workforce.
In a statement released to Sky News, he said: “Like many companies, we are continually reviewing our UK operations.”
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 mountain of multibillion-dollar 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.
As part of the deal that ensured its survival, 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.
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Cineworld also operates in Central and Eastern Europe, Israel and the USA.
The sale process only concerns its UK business, according to internal sources.
It was unclear whether Picturehouse, which is also owned by Cineworld, is also part of the auction.
A number of financial investors are expected to scrutinize bids for Cineworld’s UK business, while rival Vue is also expected to assess whether a bid would be viable.
Last year, Sky News revealed that Vue had gathered support for the acquisition of Cineworld, but was excluded from a process that was ultimately abandoned.
Vue itself has undergone a series of financial restructurings, but its balance sheet is now on a sustainable footing after dealing with the twin shocks of the pandemic and the Hollywood writers’ strike.
Photo: PA
Since emerging from bankruptcy protection, Cineworld has appointed a new leadership team, naming Eduardo Acuna, who ran the operations of Mexican cinema chain Cinepolis in the Americas, as its chief executive.
Eric Foss, former Pepsi executive, was parachuted in as president of Cineworld.
A property industry source said any attempt by Cineworld to pursue a CVA or other restructuring that compromised the owners would likely be met with strong resistance.
Major summer film releases in Britain include Despicable Me 4, A Quiet Place: Part One and Alien: Romulus.
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