ICSM Business – hospitality and entertainment insolvency news: creditors set for a ‘hair cut’ with a ‘specific insolvency mechanism’ instead of a CVA as Cineworld struggles to survive

By Harry Mottram: In the terminology of the insolvency industry, it appears that cinema chain Cineworld is hoping their creditors will take a ‘hair cut’ with a ‘specific insolvency mechanism’ instead of a CVA. According to information obtained by Sky News, the movie chain and its advisors at AlixPartners have started formally investigating a ‘specific insolvency mechanism’  rather than what had previously been reported that they would go for a company voluntary arrangement (CVA).  Cineworld UK is in financial trouble following a downturn in business and its USA chain going bust in 2022 and seeking Chapter 11 bankruptcy protection.

With 100 branches across the country and a further 29 in the Republic of Ireland the firm has already announced the closures of six outlets at Glasgow Parkhead; Aspects Leisure Park, Bedford; Hinckley, Leicestershire; Loughborough, Leicestershire; Yate, Bristol; and Swindon Circus, Wiltshire. Creditors that include suppliers, landlords and lenders were expected to receive the cinema chain’s proposals this week.

The restructuring plan negotiated by AlixPartners needs to be agreed with creditors otherwise more cinemas could close or the entire business could collapse completely. It is expected that rival cinema groups may step in to take over one or more of the doomed outlets but at present everything is up for grabs.

Ian Carrotte of ICSM said the hospitality sector was hit by Covid lockdowns but the rise of online cinema trough Netflix and Disney amongst others had eaten into their business. He said: “The Cost of Living Crisis this year has also seen household budgets cut with the number of family treats trimmed. It is the same for holiday firms and the nighttime economy. And another factor is the absence of a block buster like a James Bond movie or a surprise hit movie that becomes the must-see film this summer.”

++++++++++++++++

++++++++++++++++++++++++++++

ICSM CREDIT
For information on ICSM visit www.icsmcredit.com or call 0844 854 1850.
ICSM, The Exchange, Express Park, Bristol Road, Bridgwater, Somerset TA6 4RR. Tel: 0844 854 1850. www.icsmcredit.com. Ian.carrotte@icsmcredit.com