The embattled cinema chain Cineworld is set to announce its reorganisation next month, whilst fighting off a lawsuit with very serious consequences.
Cineworld has announced that it will make its restructuring plans clear by the end of next month as the struggling company navigates its way through bankruptcy proceedings.
Having filed for bankruptcy in August with supposed debts of $5bn and only $4m of liquidity to its name, the blockbuster drought over the past few months has hit Cineworld hard. Perhaps even harder than its competitors due to aggressive expansion over the past few years which has seen the group take on lots of debt en route to becoming the second-largest cinema chain in the world.
One area of that aggressive expansion continues to haunt the company is its aborted merger with the US firm Cineplex. Cineworld pulled out of a deal to acquire that company in 2019 and was duly fined around a billion Canadian dollars for it by a court of that country. Whilst Cineworld appealed, the verdict continues to loom over the company, although bankruptcy proceedings having slowed the appeals process down somewhat, which could work in Cineworld’s favour.
With the theatrical landscape still shifting and industry titans like ex-Disney boss Bob Iger predicting that cinemas will never recover, the group’s future is by no means certain.
Cineworld will have to box very cleverly to navigate the appeals process whilst restructuring the company to meet the demands of a market that may well be volatile for years to come. The way in which the company acts in the next couple of years will be vital towards building a more secure future for itself and its 30,000 employees. We’ll bring you more updates on this one as we hear it.
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