Aug 22 (Reuters) – The potential bankruptcy of the world’s No. 2 cinema operator Cineworld ( CINE.L ) is casting a spotlight on the wider industry as it struggles to recover from the pandemic and compete with the growing popularity of streaming
Debt-laden Cineworld, which owns the Regal chain in the U.S. and runs cinemas in nine other countries, said last week that a lack of blockbusters was driving away moviegoers and hurting its cash flows. Read more
Last week, AMC Entertainment Holding Inc ( AMC.N ) also posted a tough third quarter due to a slim movie slate. Its shares fell 38% in early US trading on Monday.
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Shares in Cineworld, which hit an all-time low on Friday after the Wall Street Journal first reported its potential bankruptcy, were down 26 percent at 3 pence by 1340 GMT. Read also : Business travel is making a comeback, but it looks different. This compares to a high of over 310p in 2017.
Cineworld, which had $8.9 billion of net debt at the end of 2021 and had previously said it was looking for ways to restructure its balance sheet, confirmed on Monday that one option was a voluntary Chapter 11 bankruptcy filing in the United States.
“Cineworld would expect to maintain its operations in the normal course until and after any filing,” said the London-listed company, which operates more than 9,000 screens and employs about 28,000 people.
While Cineworld’s specific problem is its debt pile, the broader shift in the way audiences want to see movies is a trend unlikely to be reversed or made easier for cinema chains , said Hargreaves Lansdown analyst Sophie Lund-Yates.
“Cineworld’s challenges are a wake-up call for the entire industry,” he said.
A Chapter 11 filing can allow a company to stay in business and restructure its debt.
“But because the company has so few tangible assets, much of its debt will be uncollectible and its shareholders will be wiped out,” said Barry Norris, fund manager at Argonaut Capital.
Cineworld, which declined to comment on the hedge fund’s remarks, said it was in discussions with many of its key stakeholders, including lenders and legal and financial advisers, and reiterated that any deleveraging would result in a very significant dilution of existing holdings.
Two years ago, it abandoned a plan to take over rival Cineplex ( CGX.TO ) and is in the middle of a legal dispute with the Canadian company, which has asked for C$1.23 billion ($946 million) in damages for damages for abandoning the agreement. .
Over the years, Cineworld has expanded globally through acquisitions, including the purchase of Regal Entertainment for $3.6 billion in 2017.
The company has payment obligations to disgruntled former Regal shareholders, further straining its finances.
Excluding lease liabilities, Cineworld’s net debt was $4.84 billion at the end of 2021 and it had cash of $354 million.
Its third-largest shareholder, Polaris Capital Management, had reduced its stake to about 4.7 percent last Wednesday from a previous stake of 7.8 percent, a filing showed on Monday.
Top shareholder Global City Holdings owns about 20% of Cineworld, according to Refinitiv data. Global City shares are held in trust for the children of the company’s CEO, Moshe Greidinger, and his brother, Deputy CEO Israel Greidinger.
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Reporting by Yadarisa Shabong in Bangalore; Additional reporting Simon Jessop in London; Editing by Mike Harrison and Mark Potter
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Which cinema is best in UK?
The cinema topping the list is The Stella Cinema in the bustling Dublin suburb of Rathmines, which was Ireland’s largest cinema when it opened in 1923. See the article : 3 timely tips for finding and using travel insurance this summer. Now sympathetically restored, it boasts midnight screenings and a pop-up cocktail bar straight out of The Great Gatsby.
Which cinema has the most screens in the UK? Larger by screen capacity
- Cineworld O2, Greenwich: 750 (screen 11)
- Cineworld, Sheffield: 691 (screen 7)
- Cineworld, Renfrew Street, Glasgow: 663 (screen 3)
- Cineworld, Bolton: 626 (screen 7)
- Cineworld, Nottingham: 590 (screen 10)
Which is the biggest cinema in UK?
Screen size compared to other large screens in the UK. The BFI London IMAX is the largest cinema screen in the UK. It measures 20m high by 26.5m wide with a total screen size of 520m².
Is Odeon or Vue better?
Vue’s website wins hands down. The Odeon and Cineworld sites can be tricky to navigate and an absolute pain when ordering tickets. What is this? Vue’s site is easy to navigate, very clear, and its clean, simple design has never personally caused me any problems.
How does Cineworld make money?
Ticket sales (and member revenue if applicable) Food, beverage and merchandising sales. Advertising revenue (screen and brochure) Public funding.
Is it profitable to make a movie? Movie business owners can usually start making a profit after a few years. Once a movie theater is established, you will see profits between $50,000 and tens of millions of dollars.
How much does it cost to open a cinema?
The average cost to open a movie theater in the United States is at least $1.5 million. There are many individual expenses that factor into the overall price. Monthly operating costs for a movie theater range from $30,000 to $180,000, depending on the scale of the operation.
Who owns Cineworld?
In 2004, Cineworld was acquired by private equity group Blackstone for £120 million.
Does AMC own Vue?
Private equity firm Doughty Hanson & Co acquired Vue in November 2010.
Who is the CEO of Vue Cinemas? J. Timothy Richards, Founder and CEO Since starting the business 22 years ago, Vue International has grown organically and through a series of strategic acquisitions to become one of the world’s leading cinema operators in nine countries .
Who owns Vue cinema chain?
Is Vue a franchise?
VUE is one of the world’s leading multinational cinema franchises, with 225 locations and nearly 2,000 screens worldwide.
