Cineworld has released a first update ahead of the planned closure of six of its cinemas in the United Kingdom.
The cinema chain’s parent company will inject £35 million into its film estate if its rescue deal is a success. Sky News reports that Cineworld’s backers have agreed to provide budget to improve its sites so that the company can “catch up with its most successful competitors”.
The proposed financing was presented to Cineworld’s creditors as they prepare to vote on a restructuring plan next month. The document says: “The US organization will provide an additional £35m of investment to the UK organisation, if restructuring plans are sanctioned through the cut, which will be used for capital expenditure, including the renovation and upgrade of cinemas viable. “
However, the restructuring plan, which will be voted on at the end of September, has raised concerns that, if approved, a dozen Cineworld sites could be shut down. This is in addition to the six screened through the cinema chain in July. He reported that “dissatisfied owners” could simply vote against it, as they would be “harmed” by the closures.
The documents sent to creditors imply that about 50 other Cineworld sites are in categories that require accepting revised lease agreements in order to continue operating. According to the proposals, 33 sites, classified as Class B, “require a reduction in ERV [Estimated Rental Value] rent to make the sites on a viable basis in the long term. “
A further 38 Cineworld cinemas would be unaffected, while 16 Class C1 and C2 tenancies require rent discounts or 0 rent to be financially viable. The documents said the company did not have “sufficient financing” to meet a quarterly rent bill on June 24. of £15. 9 million.
The documents said: “The UK organization did not have sufficient liquidity to make the June 2024 rent payment and required additional funding from the US organization to meet this liquidity need. Without this funding, the UK organization would have been bankrupt. from a monetary point of view. “
A Cineworld spokesperson said on Wednesday: “The restructuring plan will give Cineworld in the UK the opportunity to raise further funding to meet its current capital needs, reduce debt and take advantage of a significant capital expenditure program by of the group. “
In July, the theater chain announced it would close six theaters until the end of September if cost-cutting plans were to gain legal approval. The sites to be closed were described as “commercially unviable. “The sites that will be closed include:
The cinema chain has around a hundred sites in the United Kingdom and the Republic of Ireland, operating under the Cineworld and Picturehouse brands and employing around 4,400 more people; Internationally, the chain has around 750 sites. Like other cinema chains, Cineworld has been hit hard by the Covid-19 pandemic and the lockdowns that have been imposed. On top of this, Cineworld faced the added pressure of having to compete with streaming services.
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