Cineworld parent Regal Entertainment Group has received about 40 non-binding offers from potential buyers, but none show interest in the exhibition giant’s UK or US assets or come close to covering $6 billion in debt.
On Tuesday, during a virtual status hearing before Judge Marvin Isgur of U.S. Bankruptcy Court in Houston, Joshua Sussberg, a lawyer for U.K.-based Cineworld, said initial bids received by the Feb. 16 deadline were for assets in the rest of the world, mainly for theaters in Central Europe, Eastern Europe and Israel.
And while the initial sale process provoked “some strategic interest across the business,” Sussberg reported that none of the offers from potential buyers represented all-money offers. “And no offer came close to the $6 billion in securities that exist on the company’s balance sheet today,” Cineworld’s lawyer added.
The lack of firm offers for the whole of Cineworld has the company now moving towards a court-directed settlement of its bankruptcy process, with no firm prospect of keeping the company intact as interest in the Eastern European assets is particularly at the fore.
Cineworld and its creditors have set a second final bidding deadline of April 10, with the formal auction to be held a week later on April 17. At the same time, in parallel, the exhibitor and its creditors continue to negotiate support for a reorganization agreement, which will likely include a debt-for-equity transaction, which will be preliminarily examined and possibly approved by the court by the end of May.
“I admit that there are still some major issues that have not been resolved. But we’re all committed professionally to work and do whatever it takes, whether that means sitting at home for a few days to get this done next week,” Sussberg told the court as both sides remained committed to achieving RSA agreement by February 27.
If this definitive Cineworld reorganization agreement cannot be reached, however, the process of selling some or all of Cineworld’s assets as part of a Chapter 11 bankruptcy arrangement is expected to move forward.
In September 2022, Cineworld, the world’s second-largest movie theater company and owner of Regal Cinemas in the US, filed for Chapter 11 bankruptcy in a Texas court as it grappled with lower post-pandemic admissions and a heavy debt load .