Cineworld, the world’s second-largest movie theater operator and parent to Regal Cinemas in the U.S., has denied reports that it has been in talks of selling some of its assets to AMC, the world’s largest movie theater group.
The British company further stated that neither its lenders nor advisers were in talks with AMC.
Instead, Cineworld claimed that, rather than selling off assets individually, it intends to maximize the value of its assets by restructuring before seeking a buyer to purchase the whole company.
This news, which broke on Tuesday, sent the troubled company’s shares tumbling.
Last month, AMC reported that it was no longer in talks to buy theaters owned by Cineworld after fielding some initial discussions with lenders.
Cineworld has over 9,000 screens in 10 countries. The company’s finances have been devastated by the COVID-19 pandemic. As of last June, it reported debts of $5.2 billion, according to Screen Daily.
However, the real coup de grâce seems to have been Cineworld’s failed takeover of Canada’s biggest movie chain, Cineplex. In late 2021, Cineworld was forced by a Canadian court to pay $1 billion in compensation to Cineplex for the averted takeover. Cineworld shares were down nearly 40% after the announcement.
Cineworld entered Chapter 11 bankruptcy protection on September 7, which granted the company a reprieve from paying $1 billion to Cineplex and gave it some breathing room to negotiate with creditors and renegotiate leases.
Since then, Cineworld has been in talks with stakeholders to develop a reorganization plan to “maximize value for the benefit of moviegoers and all other stakeholders” and not on an individual basis.
“Shareholders have been told on numerous occasions that their investment could be significantly diluted … so the situation is more about getting back pennies in the pound rather than waiting for a big payday,” said Russ Mould, an investment research director for AJ Bell, according to Reuters.
The company said it plans to contact potential buyers this month, according to the Chicago Tribune.
