Cineworld, the second biggest cinema operator in the world, is set to exit Chapter 11 Bankruptcy in the US. This has been revealed after months of speculation suggesting that Cineworld might not be long for this world. It’s been in dire straights for quite some time now, but it seems as though there’s some light at the end of the tunnel for this company.
The company filed for Bankruptcy last year due to its ever-growing debt pile that sank into the billions. An ill-fated takeover for Cineplex in Canada, losses and the Covid-19 pandemic escalated the debt to impossible levels.
Cineworld was unable to sell its UK sites
Cineworld was also unable to sell its UK sites, which they were trying to do in order to pay off some of its debts. However, that didn’t work, and as a result, creditors have taken over the company, despite efforts to sell arms of the company in the US and UK’s operations, the company received no offers that were financially worthwhile.
It seemed to those bidders; the company wasn’t worth the value that they were trying to sell off parts of its operations which sent them back to court.
Cineworld, which operates in the UK as Cineworld and Picturehouse, held talks with former Picturehouse chief Lyn Goleby and seemed to be close to a deal, but it wasn’t to be.
Cineworld’s rival in the UK, Vue, also took an interest in the Cineworld sites but was rebuffed by the company. Rumours and leaks from AMC Theatres who operate Odeon in the UK suggested they also made overtures but were also shut down.
Will Cineworld survive this?
It’s since been revealed that the lenders have all but agreed to strong restricting plans for the debt. Alongside further funds to help the company continue to operate and within the next 60 days, they hope to leave the Bankruptcy order.
Under the plans, shareholders would be completely wiped out and be left with nothing. So, it’s not really very good news for Cineworld, and I’m still not sure whether the company’s going to survive this.
What do you make of the news? Do you think that Cineworld is going to still be around in five years’ time? Let us know your thoughts in the comments below. We’d love to hear from you!
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