Recent reports from Sky News revealed that Cineworld, the parent company of Regal, is currently exploring various options for its UK business following its emergence from bankruptcy in the U.S. last summer. One such option could involve a potential sale or restructuring of the company. AlixPartners, a consulting firm that assisted Cineworld’s lenders during the bankruptcy process, has been enlisted to provide guidance in this regard. Prospective buyers have also been contacted as part of this exploration. The sale process is expected to unfold over several weeks, according to city sources familiar with the matter.
Consideration of Company Voluntary Arrangement
In addition to the possibility of a sale or restructuring, Cineworld is also said to be considering a company voluntary arrangement (CVA) as a further step in its ongoing restructuring efforts. This move could potentially result in the closure of an undisclosed number of UK cinemas owned by the company. A spokesperson for Cineworld acknowledged the ongoing review of their UK operations, emphasizing that this is a common practice among businesses to ensure operational efficiency.
Cineworld’s financial troubles can be traced back to the challenges posed by the Covid-19 pandemic and the burden of substantial debt. The company filed for bankruptcy in the U.S. in 2022 but managed to emerge from it successfully by August of the same year. The delisting of the UK public company coincided with this development, transferring control to lenders who appointed Eduardo Acuna as the new CEO. Despite the setbacks faced during the U.S. bankruptcy process, Cineworld made the strategic decision to halt the search for buyers for its businesses in the U.S., UK, and Ireland unless presented with a compelling all-cash offer exceeding the established valuation under the proposed restructuring plan.
Eduardo Acuna, the CEO of Cineworld, expressed optimism about the company’s financial performance, stating that they had exceeded expectations in the previous year and were in a strong position for future growth. Looking ahead to 2025 and 2026, Acuna highlighted his vision for Cineworld to shift from a defensive stance to an offensive strategy, positioning the company for success in the coming years. Despite the challenges faced by the exhibition industry due to the disruptions caused by Covid and Hollywood strikes, Acuna remains confident in Cineworld’s ability to navigate through these obstacles and emerge stronger in the long run.