CVC Capital Partners and Elliott Management are among the suitors that have tabled bids for parts of Cineworld, as the debt-saddled cinema chain plots an exit from bankruptcy proceedings.
Buyout group CVC and hedge fund Elliott both made offers for Cineworld’s Israeli and eastern European businesses, according to two people familiar with the matter. The bids were first reported by Sky News.
Cineworld has one cinema in Ireland, on Parnell Street in Dublin.
Last month, Joshua Sussberg, a lawyer acting for Cineworld, told a US bankruptcy court in Texas that the struggling cinema operator had received “many offers” for its operations outside the US and the UK but only “some strategic interest” in its full business.
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Cineworld – which owns 128 cinemas in the UK under the Cineworld and Picturehouse brands and 511 cinemas in the US under the Regal brand – also runs Cinema City across six countries in eastern Europe and Planet Cinema in Israel.
Both CVC and Elliott have poured money into the leisure sector in recent years. CVC holds stakes in the Six Nations international rugby tournament and UK holiday park operator Away Resorts, having previously owned Sky Bet and Formula One. Earlier this month, Elliott invested in the expansion of UK sushi chain Wasabi.
CVC and Elliott did not table bids for Cineworld’s US and UK operations, the chain’s two biggest markets. CVC, Elliott and Cineworld declined to comment.
Cineworld, which entered into Chapter 11 bankruptcy protection last September after crumbling under net debt and lease liabilities of $8.8 billion (€8.1 billion), had previously said it was pushing for a sale of its whole business.
But a person close to the bankruptcy process said: “It’s not a stupid idea to think of selling off part of the business to reduce the amount of new capital required” when the “company emerges from bankruptcy in the coming months”.
The final bid deadline is set for next month. Lawyers for Cineworld and its secured lenders are pushing ahead with plans for a debt-for-equity swap as early as the end of May, which would give the creditors control of the business. Cineworld previously said it expects the company’s current shareholders to be wiped out in the bankruptcy proceedings.
Cineworld’s market capitalisation currently stands at just £35 million. Last week, Cineworld said it “remains in discussions with its key stakeholders” over a reorganisation plan “that maximises value for the benefit of the group and its stakeholders”. It also said the sale process, which was started in early January, was “continuing in parallel”. – Copyright The Financial Times Limited 2023
