Cineworld: Future of Whiteley cinema remains unclear as bankrupt chain hopes to strike deal to save businesses

Cineworld – which has a site in Whiteley Shopping Centre – has been approached by potential buyers. The world’s second largest cinema chain expects to come out of bankruptcy protection in the US in the first half of this year, as it chases a rescue deal.

Potential buyers approached Cineworld on Friday but none of them are willing to pay cash for the whole business. As things stand, any deal which could be made would wipe out shareholder investments.

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Cineworld hopes to be back from bankruptcy protection before the middle of the year. The company may have been hoping for a sale, but it was always seen as unlikely that it would find someone who was willing to take over the business and deal with its six billion dollar (£5 billion) pile of debt.

Based on the discussions it has had, Cineworld said “there is a route” to emerging from the so-called Chapter 11 bankruptcy proceedings. Despite this, they added: ‘The company does not believe that there will be sufficient creditor support for a plan that contemplates any recovery for equity interests.’

It is thought that any rescue deal for the business will mean handing over control to the companies and people that Cineworld owes money to, with shareholders unlikely to see a return.

Cineworld’s cinemas – which include Picturehouse – currently remain open. On Friday, Cineworld said: ‘The company has now received non-binding proposals from a number of potential transaction counterparties for some or all of the group’s business.

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‘None of these proposals involves an all-cash bid for the entire business. The company is reviewing such proposals in conjunction with its advisers and key stakeholders and, whilst no decision has been made as to whether to pursue a sale transaction, and the terms of any such transaction remain uncertain, based on the proposals received to date, it is not expected that any sale transaction will provide any recovery for the holders of the company’s equity interests.’

Cineworld entered bankruptcy protection in September, weighed down by heavy debts accumulated in part during Covid-19. Today the company owes around six billion dollars.

The Guardian reported share prices plunged by 46 per cent on Friday, before recovering to 21 per cent down.