Cineworld ditches plans to sell businesses outside UK and US
The debt-ridden business said it had abandoned the sale of its businesses in Eastern Europe and Israel – which together form its ‘rest of the world’ division – saying the proposals put forward by suitors “did not meet the value level required by the group’s lenders”.
It comes after the world’s second-biggest cinema group ditched the sale process for its UK, US and Ireland businesses earlier this month after failing to find a buyer and unveiled a restructuring that is set to wipe out shareholders.
The plan aims to reorganise its five billion US dollars (£4bn) debt pile in order to exit the Chapter 11 bankruptcy during the first half of this year.
Cineworld filed for a Chapter 11 bankruptcy in the US last year, allowing it to reorganise its debts and assets to have a fresh start, while remaining in business.
But the group’s restructuring means shareholder investments would not be rescued under the plans.
Shares, which have already plunged to record lows, were down by more than 7 per cent at one stage on Tuesday morning on the London market.
Its shares have plummeted by more than 99 per cent over the past five years, after being hit hard by the pandemic which forced it to close some of its cinemas.
The company’s “rest of the world” business covers Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Romania and Israel.
The division was not under bankruptcy protection.
Cineworld’s recovery plans include cutting its debt mountain by around 4.53bn US dollars (£3.6bn) and raising 2.26bn US dollars (£1.8bn) in new funding.
Cineworld has insisted that the debt restructuring will not affect its 750 cinemas globally, saying it will be “business as usual” across the sites.
It said: “Cineworld and its brands around the world – including Regal, Cinema City, Picturehouse and Planet – are continuing to welcome customers to cinemas as usual.
“The group continues to honour the terms of all existing customer membership programmes, including Regal Unlimited and Regal Crown Club in the United States and Cineworld Unlimited in the United Kingdom.”