The parent company of Regal Cinemas, the second-largest movie theater operator in the U.S., is hunting for a financial lifeline.
U.K.-based Cineworld is in talks with investors for rescue financing or debt to fund a bankruptcy proceeding, the Wall Street Journal reported.
The company reported that revenue in the first half of 2020 declined 67 percent to $712 million. It has $4 billion in lease obligations and $4 billion in debt overall. Last month, it re-shuttered its more than 500 U.S. theaters after reopening in August.
In September, Cineworld said it had taken steps to improve its cash flow. Staying closed, however, could be less expensive than remaining open with few moviegoers. Lackluster performance of a Labor Day weekend premier of Christopher Nolan’s “Tenet” led observers to question whether movie theaters would return even after the pandemic eases.
In the short-term, many movies are being released directly to streaming services, skipping traditional theaters altogether. With more Americans couch-bound, demand for production space has surged. In June, Blackstone was in talks with Hudson Pacific Properties to develop production space in Los Angeles — a deal valued at $1.4 billion.
Meanwhile, movie release dates — including “James Bond,” “Dune” and a sequel to “Top Gun” — have been delayed until 2021 and beyond.
AMC Entertainment Holdings, the largest movie-theater operator in the U.S., has said it would run out of cash by the end of the year if conditions did not improve.
[WSJ] — Georgia Kromrei