Cineworld PLC is currently in amongst talks with advisors and creditors to enter a CVA agreement. A completely voluntary agreement means a chance to wipe off unsecured debts and restructure agreements with landlords. The company has currently shut all 657 sites across the U.K. and America.
What Happens in A CVA?
Credit: Cineworld
Read more: Cineworld To Close All Its 128 UK Sites After No Time To Die’s Delay
The Financial Times is reporting that the consideration is being used to cut costs across the board to aid its survival. CVA’s are a way to prevent a company from entering administration and going bankrupt.
Sites can also be expected to close as the company looks to perform saving costs of loss leaders. It allows debts to be paid back over time, 75% of its creditors via value must agree to the terms for it to be allowed.
It can allow for debt to also be removed by agreement. In simple terms, it’s a “have something rather than nothing” kind of deal. Staff can also lose long term redundancy rights too as the company is technically insolvent.
Cineworld PLC is currently $6.2b in debt and is desperately trying to negotiate rents with landlords for its 127 rental sites. The U.K. arm is currently being sued by Landlord AEW for £308k in unpaid rent.
As well as by the Trocadero Centre for over £1.4m in unpaid rent from the flagship Picturehouse venue. The company has no current plans organised for reopening and is utilising the U.K. furlough scheme for its U.K. sites.
The shares of the company which recently took a hit due to the pandemic have jumped almost 70% since the Pfizer vaccination news hit last week. We’ve reached out to Cineworld for a statement but have received no response.
What do you make of this news? Are you worried about the future of cinemas in the UK and in the US? Let us know your thoughts in the comments below.
What do you make of this story? Let us know in the comments below or on our Facebook or Instagram pages! And if you enjoy listening to film podcasts, why not check out our podcasts, Small Screen Stories and Small Screen Film Club wherever you get your podcasts!
[…] … visit Small Screen to read full story […]