Troubled Cineworld denies talks with Odeon owner and says it will focus on group sale

Business

Crisis-hit Cineworld has denied claims by the owner of rival Odeon that they have held talks over the sale of cinemas, saying it intends to sell the group as a whole and is yet to begin the process.

AMC Entertainment said last month that it had backed out of negotiations with Cineworld on the purchase of some sites in Europe and the US.

But Cineworld, which filed for US bankruptcy protection in September to try to restructure its debt and strengthen its balance sheet, said on Tuesday that no such talks had taken place.

The group said it was going ahead with a marketing process to sell its assets and expected to begin contacting potential buyers later this month.

It forms part of its plans to restructure the group and emerge from bankruptcy in the first three months of this year, in an attempt to maximise value for “moviegoers and all other stakeholders”.

The chain and the wider industry has been plagued with a slow recovery in audience numbers since pandemic lockdowns shuttered cinemas.

Cineworld, however, was also the architect of an own goal.

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Aggressive expansion ahead of the public health emergency – including a $3.6bn deal to buy Regal in 2017 – meant it became the world’s second-biggest chain.

However, the buying spree combined with the COVID revenue hit to batter its finances.

The group said on Tuesday there was “no guarantee of any recovery” for shareholders if it does agree to a sale.

“As previously announced, it is expected that any restructuring or sale transaction agreed with stakeholders will result in a very significant dilution of existing equity interests in Cineworld,” it said in the statement.

Shares, down 80% over the past six months, fell a further 20% shortly after the open but later recovered the ground lost earlier in the day.

Russ Mould, AJ Bell’s investment director, said of the latest update: “Shareholders have been told on numerous occasions that their investment could be significantly diluted… so the situation is more about getting back pennies in the pound rather than waiting for a big payday.”

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