The multiplex giant is working with AlixPartners on options for its UK business that could lead to a sale or restructuring, such as a company voluntary arrangement, Sky News learns.
One of Britain’s biggest cinema chains is secretly in sales talks as part of a strategic review that could lead to a wholesale restructuring of its business.
Sky News has learned that Cineworld, whose parent company went through a series of insolvency proceedings last year, is working with advisers on a possible sale of its UK operations.
Cineworld, which trades from more than 100 locations in Britain and employs thousands of people, has begun contacting potential suitors in recent days.
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AlixPartners, the restructuring adviser that handled the administration of London-listed holding company Cineworld last year, has been brought in to work on the process.
City sources said this weekend that the sale process is expected to take several weeks.
But they added that the cinema giant was also expected to explore the possibility of a company voluntary arrangement (CVA) – another restructuring process that could threaten the closure of an unspecified number of its UK cinemas.
A spokesman for Cineworld at its public relations adviser, Hill & Knowlton, said it declined to provide information on the number of sites the company operates in the UK or how large its workforce is.
In a statement released to Sky News, he said: “Like many companies, we are constantly reviewing our UK operations.”
Cineworld has grown into a global industry giant under the leadership of the Greidinger family, acquiring chains including Regal in the US in 2018 and the British company of the same name four years earlier.
However, its mountain of multibillion-dollar debt plunged it into crisis, forcing the company into Chapter 11 bankruptcy protection in 2022.
It pulled out of the London Stock Exchange last August after seeing its share price collapse amid fears for its survival.
In a deal that ensured its survival, several billion dollars of debt was swapped for stock, with a significant amount of new money injected into the company by a group of hedge funds and other investors.
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Cineworld also operates in Central and Eastern Europe, Israel and the USA.
According to insiders, the sale process only involves the UK business.
It was not clear whether Picturehouse, which Cineworld also owns, is also part of the auction.
A number of financial investors are expected to explore bids for Cineworld’s UK business, while rival Vue is also likely to assess whether a bid would be viable.
Last year, Sky News revealed that Vue had gathered support to take over Cineworld but was frozen out of the process, which was eventually abandoned.
Vue itself has undergone a number of financial restructurings, but its balance sheet is now on a sustainable footing after dealing with the twin shocks of the pandemic and the Hollywood writers’ strike.
Since emerging from bankruptcy protection, Cineworld has appointed a new management team and installed Eduardo Acuna, who ran the operations of Mexican cinema chain Cinepolis in the Americas, as its CEO.
Eric Foss, a former Pepsi executive, was parachuted in as chairman of Cineworld.
One property industry source said any attempt by Cineworld to carry out a CVA or other restructuring that compromised the landlord was likely to be met with fierce resistance.
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