Cineworld is poised to announce a major restructuring plan this week that will see the closure of around 25 cinemas across the UK and result in hundreds of job losses.
The cinema operator is expected to reveal details of the overhaul on Friday, according to Sky News.
Reports suggest that around half a dozen cinemas will begin winding down immediately, with the remainder expected to close by late summer. The planned closures will slash Cineworld’s British footprint by at least a quarter.
While the exact number of job losses remains unclear, it will be “at least in the hundreds” according to one City source.
Cineworld, which filed for bankruptcy in the US in September 2022, is in talks with commercial landlords Landsec and Legal & General about the restructuring plan.
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These discussions include negotiations for rent reductions at an additional 50 cinemas. If approved by creditors, around 25 locations will remain unaffected by the closures.
Cineworld’s recent headaches began in 2020 when global lockdowns during the Covid-19 pandemic forced it to turn off its screens.
Following this, the company’s share price plummeted amid a severe debt crisis, leading to its delisting from the London Stock Exchange in 2023.
A debt restructuring deal later that year converted billions of pounds in debt into shares and injected fresh capital into the business.
But the cash and a new leadership team have not been enough to save it from a similar predicament less than two years later.
The cinema chain initially explored selling the business but has since shifted to a formal restructuring process. AlixPartners is advising Cineworld on the current plan.
The restructuring proposal requires approval from a majority of creditors. Some landlords are reportedly considering opposing the plan but it is uncertain whether this could block the restructuring entirely.
City A.M. has approached Cineworld and Alix Partners for comment.