Regal Cinemas owner seeks rescue package and considers permanently closing some theaters
The parent company of Regal Cinemas is reportedly considering a range of options to survive the pandemic, including permanent theater closures.
Owner Cineworld Group PLC is in talks with investors for rescue financing to help to avoid filing for protection from creditors in insolvency proceedings, people familiar with the matter told the Wall Street Journal.
UK-based Cineworld, which operates more than 500 theaters in the U.S., closed all of those locations last month as a cost-cutting measure after re-opening in August — and some may never reopen.
The delayed release of major blockbusters such as the James Bond film No Time To Die, which was pushed back to April from a scheduled opening this month, dealt a major blow to theater owners such as Cineworld.
Another option under consideration would involve a loan from investors to finance an insolvency proceeding, the British equivalent of bankruptcy, according to the Journal.
The parent company of Regal Cinemas is reportedly considering a range of options to survive the pandemic, including permanent theater closures. Above, a theater in Irvine, California
The delayed release of major blockbusters such as the James Bond film No Time To Die dealt a major blow. A poster for the movie is seen in Delaware this week
The Financial Times first reported that Cineworld was considering a filing under Britain’s equivalent of chapter 11.
A Cineworld spokesperson declined to comment on the reports when reached by DailyMail.com.
Theaters across the country have suffered severe financial strain under lockdown restrictions, and major markets such as Los Angeles and New York have not allowed cinemas to re-open since they were ordered closed in March.
Cineworld reported in September that revenue for the first half of 2020 was down 67 percent, to $712 million. The company has over $4 billion of total debt, as well as more than $4 billion of lease obligations.
Cineworld appointed advisers from restructuring specialists AlixPartners last month to engage in emergency talks with its lenders, as it expects to breach loan covenants in December.
The company is currently in negotiations with landlords regarding rent on its 127 UK sites and could use insolvency proceedings to lock in lower payments across its holdings.
A sign pleading for theaters to reopen is displayed on the marquee at Regal Cinemas in Times Square last month in New York City
Cineworld, the world’s second-largest cinema chain, is also considering permanently closing UK cinemas, the FT reported.
The company last month temporarily shut its U.S. and UK operations, leaving 45,000 people unemployed for the foreseeable future.
When last month’s closures were revealed, staff took to Twitter to slam the company for not telling employees about the plans before they were reported in the Sunday Times – which said in its report that it had approached Cineworld for a comment prior to publication.
One Twitter user said: ‘This is going out to all my fellow Cineworld colleagues up and down the country, wishing you the best in these early hours with the news of the closures.
‘Been with Cineworld for 12 years, to find out I’ve not got a job via Twitter; once again; is damn appalling.’
The announcement that the new 007 film would be delayed until April 2021 was made just weeks before it was about to be released, coming as a huge blow to cinemas.
The highly-anticipated movie had already been postponement from its original release date in April due to coronavirus.
A “No Time To Die” poster is displayed on a Regal Cinemas movie theater in Oakland, California last month. Regal shut down all of its more than 500 US locations in October
Then, the release of the highly-anticipated Fast and Furious sequel F9 was also delayed again, while Disney announced in September that its live-action version of Mulan instead debut on its streaming service Disney Plus instead of a theatrical release.
Union Bectu, which represents workers in the UK cinema sector, urged filmmakers last month to think ‘carefully’ about the impact delayed releases could have on the industry.
A spokesperson said: ‘The delay in the release of the Bond film, along with the other delayed releases, has plunged cinema into crisis.’
Boss Philippa Childs said: ‘If these reports are true, then the first people Cineworld should be informing are their staff who will suffer as a result – not the Sunday newspapers.
‘Whilst cinemas have been able to open since July, and the experience of those who have visited since then has been an overwhelmingly positive one, the stark reality is that without new releases it is unlikely that footfall will increase to a level that makes opening financially viable.’