Cineworld, the second largest theater operator in the world, is searching for buyer after filing for Chapter 11 bankruptcy last September. This comes after reports that they were in talks with AMC the previous month to sell some of their theaters in North America and Europe. Unfortunately, those talks broke down, and now Cineworld is doubling down on their unwillingness to sell individual assets to their biggest competitor, instead seeking a group sale of all their theaters.
The company released a statement on Tuesday in which they wrote, “in light of recent media reports, Cineworld would like to clarify that neither it nor its advisers have participated in discussions with AMC Entertainment Holdings, Inc. regarding the sale of any of its cinema assets.” They also added, “not initiated and does not intend to initiate a separate marketing process for the sale of any of its assets on an individual basis.”
The pandemic battered Cineworld’s finances. The parent company of Regal is accumulating $4.8 billion in debt due to Covid shutdowns. Its finances were further damaged when it failed to acquire Canadian chain Cineplex. The deal falling through led to a lengthy legal battle, leaving Cineworld with a $1 billion compensation bill.
After filing for bankruptcy, Cineworld and key investors started creating reorganization plans. The restructuring talks are still in progress, but the company expects them to result in a “significant dilution of existing equity interests” with “no guarantee of recovery” for interest owners.
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