Regal Cinemas in talks for rescue deal

Theater chain, owned by Cineworld, closed all 500 US locations last month

The second-largest movie theater operator in the U.S. is hunting for a financial lifeline (iStock)
The second-largest movie theater operator in the U.S. is hunting for a financial lifeline (iStock)

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.

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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.

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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