Cineworld, the world’s second-biggest cinema chain, is yet to receive any offers to buy the whole company out of bankruptcy following a deadline for interested parties to declare their intention to bid.
Joshua Sussberg, a lawyer representing Cineworld, told a US bankruptcy court in Texas on Tuesday that the debt-saddled cinema operator had contacted a “broad universe” of about 40 potential suitors to discuss a sale since early January.
But while Cineworld received “many offers” for its operations outside of the US and the UK, its two biggest markets, potential buyers only expressed “some strategic interest in the full business” and did not come forward with a firm offer.
Last month, the cinema operator, which owns the Regal Cinemas chain in the US and the Picturehouse brand in the UK, initiated a sales process “focused on proposals for the group as a whole”, stressing that it had no plans to sell “any of its assets on an individual basis”.
Cineworld, which entered into bankruptcy protection last September after crumbling under net debt and lease liabilities that had ballooned to $8.8bn, also operates more than 100 cinemas across eastern Europe under the Cinema City brand and 10 in Israel.
Sussberg added that Cineworld “did not receive any all-cash bids and no bid came anywhere near the $6bn of secured indebtedness that exists on the company’s balance sheet today”. The final deadline for a bid is set for April 10.
With no signs of a buyer in sight, lawyers for Cineworld and its secured lenders are pushing ahead with plans for a debt-for-equity swap, which would give the creditors control of the business and probably wipe out the existing shareholders.
A debt for equity transaction could be approved by the end of May, with a restructuring agreement in place by next week.
“I admit there’s still some major issues outstanding but we are all committed on the professional side to work through and do whatever it takes,” said Sussberg.
In October, Cineworld agreed a $1bn debt repayment with its first lien lenders, many of which were landlords. Following the agreement, the highest priority lenders are now a group of institutional investors, including Invesco, Eaton Vance and Fidelity, known as the legacy lender group.
A person close to the group said it was “no surprise” that no bidders came forward looking to spend “billions in cash on a struggling company”. They added that it was still possible some assets may be sold individually, despite Cineworld’s ambitions to avoid this.
The person said the future of Mooky Greidinger, Cineworld’s chief executive, who built the company from a family cinema business in Israel, was still unknown.
Late last year, the lenders held talks with rival AMC over selling some of Cineworld’s UK and US operations, but the talks fell through.
Sussberg added that sales performances at Cineworld, which operates 751 sites globally, had improved in January and February thanks to Avatar: The Way of Water and Ant Man and the Wasp: Quantumania, and was set to improve further once summer blockbusters arrived on screens.