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Cineworld calls off sale as it plans bankruptcy exit

Tim Baysinger
Mar 29, 2023
Illustration of a theater stage, with a dollar bill printed on the curtains.

Illustration: Brendan Lynch/Axios

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.
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