Cineworld considering rent cuts and site closures

Cineworld in Ipswich

Cineworld in Ipswich - Credit: Archant

Cineworld is reportedly considering cutting rents and permanently closing some UK cinemas after being hammered by the coronavirus pandemic.

The group has a site on Ipswich’s Cardinal Park and in Bury St Edmunds and Haverhill as well as running Cinema City in Norwich under the Picturehouse brand which it owns.

It is not yet clear whether the news will impact any of these cinemas.

Shares in the company slid lower on Thursday morning after the Financial Times reported that the chain was mulling a Company Voluntary Arrangement (CVA) restructuring deal.

MORE: Online wine retailer sees sales increase by 80pc in lockdownIt is understood that the CVA is one of a number of options currently on the table.

Cineworld appointed advisers from restructuring specialists AlixPartners last month to engage in emergency talks with its lenders, as it expects to breach loan covenants in December.

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The company is currently in negotiations with landlords regarding rent on its 127 sites and could use a CVA to seal lower payments across its estate.

Cineworld declined to comment on the reports.

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Last month, the chain put thousands of jobs at risk as it shut all of its UK and US cinemas indefinitely after the release of the latest James Bond film was pushed back to 2021.

The group employs around 45,000 staff, including 5,500 in the UK.

On Thursday, the owner of London’s Trocadero Centre lodged a High Court claim against Cineworld, suing it for £1.4 million over unpaid bills.

Shares in Cineworld were down 8.7pc at 44.2p in early trading on Thursday.

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