Regal Parent Company Cineworld Explores Potential Sale of UK Cinemas

The parent company of Regal Cinemas underwent bankruptcy proceedings the U.S. in 2022

regal-cinemas
CHICAGO, ILLINOIS – SEPTEMBER 07: A sign hangs outside of a Regal Cinemas location on September 07, 2022 in Chicago, Illinois. With movie ticket sales failing to rebound to their pre-pandemic levels, Cineworld Group PLC, the owner of Regal Cinemas, filed for bankruptcy on Wednesday. (Photo by Scott Olson/Getty Images)

Cineworld, the parent company of Regal Cinemas, is reportedly exploring a sale or restructuring of its cinemas in the United Kingdom.

On Saturday, Sky News reported that Cineworld has hired restructuring consultant company AlixPartners to help oversee the process as potential bidders have been contacted. Cineworld operates approximately 100 theaters in the UK as part of a multinational chain that spans 747 locations in 10 countries.

But Sky also reported that Cineworld could explore further restructuring in lieu of a sale, which could lead to the closure of some of its British multiplexes. In a statement, a spokesperson for the chain said, “Like many businesses, we are continually reviewing our UK operations.”

During the peak of the box office in the late 2010s, Cineworld grew into one of the top companies in the movie theater industry, acquiring Regal Cinemas in 2018. But that acquisition contributed to significant debt that came to consume Cineworld when the COVID-19 pandemic closed theaters worldwide for a year.

Crippled by those closures and the slow recovery of the box office, Cineworld filed for bankruptcy in the U.S. in September 2022 and delisted from the London Stock Exchange a year later, putting it under the administration of lenders with former Cinepolis exec Eduardo Acuna hired as CEO. With that delisting, Cineworld no longer publicly reports earnings.

As part of the deal that allowed it to exit bankruptcy, Cineworld exchanged its debt for shares given to a consortium of investors and hedge funds that injected billions in cash. The company also agreed to not seek any sale of its U.S., U.K., or Ireland businesses without an all-cash bid significantly hire than what the company was valued for in bankruptcy restructuring.

Like the rest of the global box office, Cineworld and Regal have been weathering a rough first half of 2024 exacerbated by a mix of underperforming films like Universal’s “The Fall Guy” and delays to major titles caused by last year’s Hollywood strikes. The U.K. box office currently stands at $455 million, down 9% from 2023 to date, while the $2.7 billion grossed in the U.S. is down 26% to date compared to last year.

Exhibitors are trying to hold on in the hopes that 2025, a year that will have more frequent Hollywood releases and top titles like “Michael,” “Superman,” and “Avatar 3,” will lead the box office to higher and more consistent grosses. There’s also hope that the latter half of 2024 will also have more consistent box office performance with films like “Deadpool & Wolverine,” “Despicable Me 4,” “Moana 2” and “Wicked” on the horizon.

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