Cineworld, the cinema operator in US bankruptcy protection, is to sound out prospective buyers as the London-listed company tries to avoid being picked apart piecemeal.
The world’s second-biggest movie theatre operator said it would launch a formal sales process this month to find potential buyers for all of its assets, not just some of them.
The company’s larger US-based rival AMC said last month that it had held talks with some lenders to Cineworld, which have an influential role in determining its future, to buy some of its cinemas in the US and Europe.
But in its statement on Tuesday Cineworld, run by chief executive Mooky Greidinger, said that neither it nor its advisers had been party to those discussions.
The company added: “Cineworld also understands that neither the ad hoc group of lenders under the group’s 2018 credit facility nor its advisers were party to discussions with AMC.”
Despite the recent release of blockbusters including the Avatar sequel and Black Panther: Wakanda Forever, Cineworld warned that shareholders were still at risk of having all their financial interests wiped out.
There was still “no guarantee of any recovery” for equity owners as a result of the financial restructuring, the company said.
Cineworld has become a prime example of the financial woes of the cinema industry, which was hit hard by enforced closures during the pandemic and has had mixed success in wooing audiences back.
The company’s problems have been compounded by its debt burden, which was accumulated in part to fund the acquisition of Regal Cinemas in the US in 2017 and stood at $5.2bn at the end of June. An abandoned takeover of Canadian rival Cineplex, and ensuing legal battle, added to the pressure.
Cineworld, which runs Picturehouse and the namesake chain in the UK as well as cinemas in several countries in eastern Europe, burnt through $145mn of cash in the first half of last year.
The group filed for Chapter 11 protection in the US in September after its recovery in admission numbers from the peak of the pandemic fell short of those required to avoid bankruptcy.
AMC, which owns Odeon in the UK, said in its statement last month that no agreement had been reached with Cineworld’s lenders and no talks were ongoing.
Cineworld said it had “not initiated and does not intend to initiate a separate marketing process for the sale of any of its assets on an individual basis”.