Regal-owner Cineworld plans to close six movie theaters, cut jobs and renegotiate rents as part of a court-directed restructuring of its UK circuit.
“We are implementing a restructuring plan that will provide our company with a strong platform to return our business to profitability, attract further investment from the group, and ensure a sustainable long-term future for Cineworld in the UK,” a company spokesperson said late Friday.
Cineworld insisted it was not launching a court-directed restructuring bankruptcy plan, as it did in the U.S. market, but a legal process that allows rent renegotiations and other cost-cutting measures. The formal restructuring confirmed on Friday follows Cineworld, which has in all about 100 theatrical locations in the U.K., looking to put its restructuring plans to creditors in that country.
The UK cinema chain said it was looking to bring down rents to “market level” after a property market downturn in recent years, and for landlords for marginal and loss making cinemas to reset the rents to lower levels that allowed Cineworld to return to profitability.
That has happened apparently with recent landlord renegotiations after the UK chain earlier hinted at closing around 25 theaters in its home market. Now in its formal restructuring plans unveiled Friday, Cineworld points to closing six “commercial unviable” theaters in Glasgow Parkhead, Bedford, Hinckley, Loughborough, Yate and Swindon Circus.
“Cineworld is beginning a consultation process with employees at the six affected cinemas and will offer redeployment to as many of them as possible at nearby sites,” the company said as it warned of job cuts to come.
The restructuring for the UK multiplex operator follows a trio of shocks — theater shutdowns during the pandemic, entering and then exiting Chapter 11 bankruptcy protection in the U.S. and, more recently, the impact of the dual strikes on its supply of tentpole movies from key studio suppliers.
The British-based company saw its share price crater at the height of the pandemic and under the weight of a $5 billion debt load, which prompted the U.S. corporate restructuring. The second-biggest movie cinema chain behind AMC Theatres has drawn well back from its pandemic-era cliff, having greatly lightened its debt load as it attempts to ride out Hollywood’s box office recovery.
For its U.K. restructuring, Cineworld has turned to Alix Partners, which advised the company during its U.S. pandemic-era corporate overhaul.
