Cineworld may have to permanently close some UK cinemas due to pandemic
Some venues might never reopen (Image: AFP via Getty Images)
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Cineworld is reportedly considering cutting rents and permanently closing some UK cinemas after being hammered by the coronavirus pandemic.
Shares in the company slid lower on Thursday morning after the Financial Times reported that the chain was mulling a Company Voluntary Arrangement (CVA) restructuring deal.
It is understood that the CVA is one of a number of options currently on the table.
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 sites and could use a CVA to seal lower payments across its estate.
Cineworld declined to comment on the reports.
A string of major releases have been delayed
(Image: AFP via Getty Images)
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Last month, the chain put thousands of jobs at risk as it shut all of its UK and US cinemas indefinitely after the release of the latest James Bond film was pushed back to 2021.
And other releases have since either been scrapped or changed – with Superhero movie Wonder Woman 1984 set to debut simultaneously in theaters and on AT&T Inc's HBO Max streaming service in the US starting on Christmas Day, an unusual release plan prompted by the coronavirus pandemic.
Movies typically play exclusively in cinemas for roughly 75 days before they become available elsewhere.
Cineworld, which also owns the Picturehouse chain and the Regal chain in the US, employs around 45,000 staff, including 5,500 in the UK.
On Thursday, the owner of London's Trocadero Centre lodged a High Court claim against Cineworld, suing it for £1.4 million over unpaid bills.
Shares in Cineworld were down 8.7% at 44.2p in early trading on Thursday.