A popular chain of cinemas also operating in Slovakia is in trouble
We informed you back in August, that international chain Cineworld has filed for Chapter 11 bankruptcy. The company is drowning in debt and its verification is pressuring it to sell its Eastern European division. It informs about it Bloomberg. If the company decides to sell, the Slovak Cinema City cinemas will also be for sale.
It is not yet clear whether the sale will take place at all, the owner of the network did not comment on it.
Cinema City Slovakia is part of the Cineworld PLC group, which is one of the leading cinema groups in Europe. The network of multiplex cinemas in Slovakia is operated by Cinema City Slovakia s.r.o.
Cineworld covers 9 countries: Poland, Great Britain, Israel, Hungary, Czech Republic, Bulgaria, Romania, Slovakia and Ireland. Currently, the network has 222 cinemas with up to 2049 screens and supports 3,500,000 film projects for more than 90 million customers annually.
However, the capitalization of the until recently second largest cinema chain in the world has shrunk to just £68m as a result of the prospect of bankruptcy. The company agreed to explore a potential sale of the business and allow the verifier to contribute to the business plan.
There has been speculation about a possible takeover of the company by Vue International. The UK’s third largest cinema chain is considering a takeover of Cineworld ahead of a possible IPO. Vue founder Tim Richards confirmed these speculations in an interview with Times.
“We’ve done 14 deals in the last 20 years. Mergers and acquisitions are a part of the business that we are very good at. The next 18 months will see fusion opportunities of all sizes and weights,” commented Richards.
Vue operates in 227 locations in 9 countries with more than 10,000 employees. It also has a total of 91 locations in the United Kingdom and 870 in Ireland.
Cineworld also has the Regal Cinemas chain in America, which the company bought in 2018 for 5.8 billion US dollars. The pandemic, the restriction of consumer spending, the rise in popularity of streaming platforms and the purchase of an American company have affected the company’s business model. In the past, the company also wanted to acquire the Canadian Cineplex worth 2.8 billion Canadian millions, but withdrew after the outbreak of the pandemic.
Eventually, Cineplex sued Cineworld and was awarded C$1.23 billion in damages. On October 31, cinema chain Cineworld Group announced a bankruptcy settlement with owners and creditors, clearing the way for the company to borrow an additional 150 million million and pay off 1 billion billion in debt, reports Bloomberg.
Landlords and re-releases in the US dropped their opposition to paying off billions in debt after Cineworld agreed to pay at least 20 million in rent to be charged after September 30.
Cineworld filed for bank protection in September, in Texas with less than $4 million in cash. However, it should be mentioned that he previously had no intention of making any payment after September until the end of his bankruptcy.
Judge Marvin Isgur of Houston, Texas, said the settlement was remarkable given the widespread resistance by owners and creditors to financing Cineworld’s bankruptcy early in its bankruptcy. Creditors submitted 15 objections to the loan. Cineworld shares have lost more than 90% in 2022 and shareholders are likely to be eyeing a bargain takeover bid.
Sources: Bloomberg.com, Times, Cinema City Slovakia