Cineworld is lining up a rescue package after coronavirus restrictions left it struggling under the weight of its massive debt pile.
The world’s second-largest cinema chain, which owes £6.2 billion to its lenders, wants to slash its rents and potentially shutter swathes of sites as it battles to survive the Covid-19 pandemic.
It is considering a company voluntary arrangement (CVA), a form of insolvency which would allow it to only pay a portion of its debt back to creditors such as banks, bondholders and landlords.
Cineworld is lining up a rescue package after coronavirus restrictions left it struggling
Creditors often agree to these deals so they get at least some of their money back, rather than the company going bust. Cineworld was forced to close all of its 127 sites in the UK for weeks during the first lockdown.
Even though it began to reopen sites at the end of July, the comeback was short-lived. At the beginning of October it shuttered all its UK Cineworld and Picturehouse cinemas again as well as its 536 Regal locations in the US.
A string of Hollywood releases have been delayed this year, such as the latest James Bond film No Time To Die, Wonder Woman 1984 and Marvel’s Black Widow. The dearth of blockbusters meant Cineworld could not make enough money to keep its locations open.
Even when the England-wide lockdown ends, Cineworld has no plans to open. It has hired restructuring firm Alix Partners to hold emergency talks with lenders.
It is also understood to be considering raising money from investors or restructuring its debt top help avoid breaching its loan terms in December. Cineworld declined to comment last night.
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