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CURTAIN CALL
Watch the video above to find out how many screens could be closing forever - and what happens next
- James Flanders, Chief Consumer Reporter
A MAJOR cinema chain has plans to close 25 sites in a bid to shore up its finances.
Cineworldis expected to confirm the closures when it announces a restructuring plan on Friday,Sky News reports.
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Up to 25 cinemas are set to close permanently before the end of the summer.
The exact number of jobs that would be lost was unclear on Thursday, although it's understood it would be "at least in the hundreds".
The chain is also seeking to renegotiate rent agreements for around 50 of its sites.
Struggling businesses often do this to help lower their operating costs and help retain more of their brick-and-mortar estate.
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However, landlords don't need to accept what's put forward in these discussions.
This means that up to 50 additional Cineworld complexes could also be at risk of closure if the chain and its landlords cannot reach an agreement.
A further 25 cinemas will be left unaffected by the restructuring plans and will remain open for the foreseeable.
Other cinema operators are expected to step in to take over some of Cineworld's sites.
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Cineworld has been contacted for comment.
What happens next?
Cineworld's creditors and landlords are expected to formally receive the plans tomorrow (July 26).
Cut cinema costs
A creditor is an individual, business, or financial institution to whom the company owes money or is obligated to repay a debt.
It was previously reported that Cineworld's restructuring is expected to be carried out through a specific insolvency mechanism rather than a company voluntary arrangement (CVA).
Insolvency mechanisms aim to either rescue the company, liquidate it, or achieve the best return for creditors.
A CVA specifically aims to allow the company to continue trading while repaying its debts over time.
As of July 2024, the cinema chain operates out of100 Cineworld branded screens across the UK and Ireland as well as a further 28 under the Picturehouse brand.
For now, the chain's screens remain fully operational and open as usual.
What is happening across hospitality and the cinema sector?
CINEWORLD isn't the only chain that's struggling.
Odeon confirmed it would close five of its branchesin May last year.
Empire Cinema also closed multiple sitesin 2023 after falling into administration in July of the same year.
The company made the decision following "a thorough assessment of all available options".
The hospitality sector has been struggling too.
In April, family favourite restaurant chain Whitbread revealed it was set toshut more than 200 locations and axe 1,500 jobs.
It shared the plans in its full year results, saying it planned to convert 112 restaurants into hotel extensions while closing 126 "loss-making" venues.
Pub giant Wetherspoons has been closing boozers across the UK too, andByron Burger fell into administrationlast year.
In March, pizza giantPapa Johns saidit would close dozens of locations.
What else has happened at Cineworld?
Earlier this month, Cineworldwas said to be weighing up its options and considering a major restructuring, which could includeclosures.
SkyNewsreported the chain was working with restructuring adviser AlixPartners on a plan that could lead to asaleor restructuring.
According to the broadcaster, such a move could "put an unspecified number of its UK cinemas at risk of closure".
A restructuring plan allows a company to rework its balance sheet, restructuring debts and releasing cash into the business.
At the time of the report, a spokesperson for Cineworld said it was "continually reviewing" its UK operations "like many businesses".
It came afterCineworld emerged from Chapter 11 bankruptcyin theUSlate last year.
Filing for a Chapter 11 bankruptcy means a company intends to reorganise its debts and assets while remaining inbusiness.
At the time, thefutureof the chain's129 UK and Irish cinemasappeared tobe in danger.
The company's shares plunged almost 99% in the five years to 2023, as it was hit particularly hard by thepandemicand the enforced closure of its cinema sites.
Shortly after, Cineworld's UK arm collapsed into administration on July 31.
The cinema chain was delisted from theLondonStock Exchange a day later.
When a companyenters administrationin the UK, all control is passed to an appointed administrator, who must be a licensed insolvency practitioner.
Since then appointed administrators at Alix Partners have been assessing plans for a major restructure.
The business has posted significant losses as its come under pressure from platforms offering streaming services, such asNetflixandAmazon Prime.
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