Cineworld reportedly mulling CVA to get through to the spring
Cineworld is reportedly mulling entering a “company voluntary arrangement” (CVA) in a bid to keep the struggling cinema chain alive through to the spring.
As a result of new restrictions imposed by the pandemic and decisions by Hollywood execs to delay a number of blockbusters, the company has shut all 657 of its cinemas in the UK and US.
Now the FT has reported that the firm is considering a CVA in order to cut costs and gain access to fresh capital from its lenders.
It is understood that the option would help the company to reduce its property costs.
Cineworld is sitting on a £6.2bn debt pile and is also negotiating with a number of its landlords to cut rents across its 127 UK sites.
One of these, AEW, has taken the company to court over an outstanding bill on £308,000.
The firm, which is the world’s second largest cinema chain, last month hired Alix Partners for emergency talks with lenders after it took the decision to shut its screens again.
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City A.M. has contacted the company for comment on the reports.
During the first lockdown in the spring, Cineworld was forced to close between April and July, a period which saw big-budget films such as the new James Bond movie delayed.
It has not currently set a timetable for reopening in the future, saying instead that it will “continue to monitor the situation”.
Shares in the entertainment firm have however jumped 75 per cent this month on the back of hopes that a new vaccine against the coronavirus disease could soon be in use.
On consecutive Mondays, Pfizer and then Moderna have both said that their treatments are over 90 per cent effective against the disease, prompting markets to soar.