Home Business Regal Cinemas owner Cineworld eyes UK theater closures and rescue deal

Regal Cinemas owner Cineworld eyes UK theater closures and rescue deal

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Regal Cinemas owner Cineworld, the world’s second-largest movie theater operator, is considering a rescue deal that could spur permanent UK cinema closures.

The deal, dubbed “Company Voluntary Arrangement,” would help the company weather the pandemic by restructuring and renegotiating its growing $8.2 billion pile of debt.

Cineneworld has hired restructuring experts AlixPartners to help with the plan, according to the Financial Times, which first reported the news.

In order to remain in business, Cineworld said last month that it would temporarily close all of its UK and US theaters until early 2021, a move it blamed on the continued postponement of blockbusters into next year.

Now, permanent shuttering of some of its 126 UK cinemas, including the Picturehouse chain, is now reportedly being considered as part of the new plan. Cineworld is also renegotiating leases for rent reductions with individual landlords, the report said.

Cinemark posted a huge loss for the first half of the year after it was forced to temporarily close most of its cinemas in mid-March. Although it has reopened some cinemas since late August with limited capacity, the chain is still not bringing in enough business.

The cinema giant warned in September that it might need to raise more money in the event of further coronavirus restrictions or movie delays due to COVID-19.