One of Britain’s biggest cinema chains is secretly discussing a sale as part of a strategic review that could lead to a wholesale restructuring of its business.
Sky News has learned that Cineworld, whose parent company went through a series of insolvency proceedings last year, is working with advisers on a possible sale of its UK operations.
Cineworld, which operates at more than 100 sites in Britain and employs thousands of people, has started contacting potential bidders in recent days.
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AlixPartners, the restructuring adviser which last year managed the administration of Cineworld’s London-listed holding company, has been recruited to work on the process.
Municipal sources indicated this weekend that the sales process is expected to last several weeks.
They added, however, that the cinema giant should also explore the possibility of a company voluntary arrangement (CVA) – a further restructuring process which could put an unspecified number of its UK cinemas at risk of closure.
A spokesperson for Cineworld at its PR adviser, Hill & Knowlton, said it was declining to provide information on the numerous sites the company operates in the UK or the size of its workforce.
In a statement released to Sky News, he said: “Like many businesses, we continually review our UK operations.”
Cineworld became a global industry giant under the leadership of the Greidinger family, acquiring chains including Regal in the United States in 2018 and the British company of the same name four years earlier.
Its multibillion-dollar debt mountain, however, plunged it into crisis and forced the company to file for Chapter 11 bankruptcy protection in 2022.
It was delisted from the London Stock Exchange last August after seeing its share price collapse amid fears for its survival.
In the deal that ensured its survival, several billion dollars of debt was swapped for stock, with a significant amount of new money pumped into the company by a group of hedge funds and other investors .
Cineworld also operates in Central and Eastern Europe, Israel and the United States.
The sales process only concerns its UK operations, according to insiders.
It was unclear whether Picturehouse, which Cineworld also owns, was also part of the auction.
A number of financial investors are expected to consider bids for Cineworld’s UK operations, while rival Vue is also expected to assess whether a bid would be viable.
Last year, Sky News revealed that Vue had rallied support for the Cineworld takeover, but was left out of a process that was ultimately abandoned.
Vue itself has undergone a number of financial restructurings, but its balance sheet is now on sustainable footing after dealing with the twin shocks of the pandemic and the Hollywood writers’ strike.
Since emerging from bankruptcy protection, Cineworld has named a new management team, installing Eduardo Acuna, who led Mexican cinema chain Cinepolis’s operations in the Americas, as chief executive.
Eric Foss, a former Pepsi executive, was parachuted in as chairman of Cineworld.
A property industry source said any attempt by Cineworld to pursue a CVA or other restructuring compromising owners would likely be met with stiff resistance.
Major summer film releases in Britain include Despicable Me 4, A Quiet Place: Part One and Alien: Romulus.
