A MAJOR cinema chain has plans to close 25 sites in a bid to shore up its finances.
Cineworld is expected to confirm the closures when it announces a restructuring plan on Friday, Sky News reports.
Up to 25 cinemas are set to close permanently before the end of the summer.
The exact number of jobs that would be lost was unclear on Thursday, although it’s understood it would be “at least in the hundreds”.
The chain is also seeking to renegotiate rent agreements for around 50 of its sites.
Struggling businesses often do this to help lower their operating costs and help retain more of their brick-and-mortar estate.
However, landlords don’t need to accept what’s put forward in these discussions.
This means that up to 50 additional Cineworld complexes could also be at risk of closure if the chain and its landlords cannot reach an agreement.
A further 25 cinemas will be left unaffected by the restructuring plans and will remain open for the foreseeable.
Other cinema operators are expected to step in to take over some of Cineworld’s sites.
Cineworld has been contacted for comment.
What happens next?
Cineworld’s creditors and landlords are expected to formally receive the plans tomorrow (July 26).
A creditor is an individual, business, or financial institution to whom the company owes money or is obligated to repay a debt.
It was previously reported that Cineworld’s restructuring is expected to be carried out through a specific insolvency mechanism rather than a company voluntary arrangement (CVA).
Insolvency mechanisms aim to either rescue the company, liquidate it, or achieve the best return for creditors.
A CVA specifically aims to allow the company to continue trading while repaying its debts over time.
As of July 2024, the cinema chain operates out of 100 Cineworld branded screens across the UK and Ireland as well as a further 28 under the Picturehouse brand.
For now, the chain’s screens remain fully operational and open as usual.
What is happening across hospitality and the cinema sector?
CINEWORLD isn’t the only chain that’s struggling.
What else has happened at Cineworld?
Earlier this month, Cineworld was said to be weighing up its options and considering a major restructuring, which could include closures.
Sky News reported the chain was working with restructuring adviser AlixPartners on a plan that could lead to a sale or restructuring.
According to the broadcaster, such a move could “put an unspecified number of its UK cinemas at risk of closure”.
A restructuring plan allows a company to rework its balance sheet, restructuring debts and releasing cash into the business.
At the time of the report, a spokesperson for Cineworld said it was “continually reviewing” its UK operations “like many businesses”.
It came after Cineworld emerged from Chapter 11 bankruptcy in the US late last year.
Filing for a Chapter 11 bankruptcy means a company intends to reorganise its debts and assets while remaining in business.
At the time, the future of the chain’s 129 UK and Irish cinemas appeared to be in danger.
The company’s shares plunged almost 99% in the five years to 2023, as it was hit particularly hard by the pandemic and the enforced closure of its cinema sites.
Shortly after, Cineworld’s UK arm collapsed into administration on July 31.
The cinema chain was delisted from the London Stock Exchange a day later.
When a company enters administration in the UK, all control is passed to an appointed administrator, who must be a licensed insolvency practitioner.
Since then appointed administrators at Alix Partners have been assessing plans for a major restructure.
The business has posted significant losses as its come under pressure from platforms offering streaming services, such as Netflix and Amazon Prime.
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