Cineworld calls off sale as it plans bankruptcy exit
Cineworld is nearing the end of its bankruptcy process, and it's looking like the company will emerge mostly intact.
Why it matters: The theater chain's ability to navigate through Chapter 11 will calm a lot of nerves within the exhibitor industry.
Driving the news: While Cineworld is still entertaining offers for its "Rest of World" theaters in Eastern Europe and Israel, a sale of the full company "effectively has been terminated," Cineworld's lawyer Joshua Sussberg told a judge during a court hearing Tuesday.
- Two buyers from the private equity world appeared over the weekend for those businesses: Elliott Management and CVC Capital Partners. Elliott had previously weighed a bid for the whole company.
- Binding bids are due on April 5, at which point Cineworld and its creditors will either negotiate a stalking horse and conduct an auction or walk away.
The big picture: The theater industry is off to its best start since 2019, as it continues its upswing out of pandemic-era closures that battered Cineworld and its main competitor AMC.
- Buoyed by strong performances from sequels to "Avatar," "Creed," "Scream" and "John Wick," the box office is pacing ahead of last year by 25% with more than $1.6 billion in ticket sales.
- Both Cineworld and AMC are banking on the continued resurgence as studios release more movies on the big screen.
- AMC, which has seen its stock price plummet 83% over the last 12 months, has been able to avoid Cineworld's fate mostly due to retail investors pouring in money as part of the "meme-stock" craze.
Be smart: Cineworld would still retain its status as the second-largest theater owner globally if it sold off its Eastern Europe and Israel theaters, which incorporate its Cinema City and Planet chains.
- Those two chains make up 1,144 screens, compared to the 8,045 screens Cineworld owns from its Regal, Picturehouse and namesake chains in the U.S. and U.K.
- Cineworld acquired Cinema City in 2014, which at the time was the largest theater operator in central and Eastern Europe.
What's next: The company expects to file its bankruptcy exit plan Wednesday after it reached a deal with its creditors that will cut billions of dollars of debt from its balance sheet. It will file its restructuring support agreement as well.
- Bloomberg reported earlier this week that the plan would include a new CEO in place of Mooky Greidinger, who ran the company for nine years, as well as a new board and executive team.