The bankrupt chain Cineworld has denied it attempted to break up the business and sell some of its cinemas to the owner of its rival Odeon, saying it was holding out hope for a buyer interested in acquiring the entire business.
The denial comes after reports claimed the world’s second-largest cinema chain, which filed for bankruptcy protection in the US in September, had been in talks to offload some of its cinemas in the US and Europe to AMC Entertainment.
“Cineworld would like to clarify that neither it nor its advisers have participated in discussions with AMC Entertainment Holdings Inc regarding the sale of any of its cinema assets,” the company said on Tuesday. It also denied that any of its lenders were in talks with the Odeon owner.
The British cinema firm, which also owns the Picturehouse brand, emphasised it was focused on selling the business as a whole, rather than seeking buyers for individual assets, and planned to approach interested parties later this month.
Cineworld shares fell by 14% on Tuesday morning.
The company was forced to file for bankruptcy protection in the US in the autumn, after it failed to bounce back from closures during the Covid outbreak. Lockdowns, which forced most of its 751 sites to close, contributed to a $708m (£592m) loss last year, and the accumulation of $4.8bn in debts.
The bankruptcy filing process, known as chapter 11, is meant to give companies time to negotiate with creditors and reach a deal over how to reduce their debt.
Cineworld had also been grappling with the financial fallout of its abandoned takeover of the rival chain Cineplex, which left the company with a $1bn bill meant to compensate the Canadian firm for the failed bid.
“Cineworld has been in a perilous state financially after undertaking an aggressive expansion plan that saw it move into the US, quickly followed by an aborted deal in Canada”, Russ Mould, the investment director at AJ Bell, said.
“Covid then struck, leaving the business gathering dust while its debts still needed to be paid. The reopening of the cinema industry post-pandemic has not gone smoothly and Cineworld has found itself on borrowed time.
“Shareholders have been told on numerous occasions that their investment could be significantly diluted upon any restructuring or sale of the business, so the situation is more about getting back pennies in the pound rather than waiting for a big payday.”
Cinemas have been one of the biggest casualties of the Covid pandemic, with many filmgoers permanently opting to watch movies on streaming platforms at home instead.
However, there are hopes in the industry that a series of big releases this year such as Avatar 2 and Spider-Man: Across the Spider-Verse could help the sector return to something approaching normality in 2023. UK box office takings are forecast to climb to almost £1.12bn in 2023, just £100m below pre-pandemic levels.
Cineworld, which was founded in 1995, operates 500 sites in the US and more than 100 in the UK and Ireland. It also has sites in Israel and across Europe including in Poland, the Czech Republic, Slovakia, Hungary, Bulgaria and Romania.
