'An incredibly difficult time': Regal Cinemas' parent company files for bankruptcy, cites pandemic pressures
The parent company for Regal Cinemas, which operates movie theaters at the Cape Cod Mall in Hyannis and at Mashpee Commons, filed for Chapter 11 bankruptcy on Wednesday, with plans to reorganize its operations by early 2023.
Operations at movie theaters, including promotional packages, will continue normally for now, according to an announcement about the filing by the Cineworld Group company posted on its website https://www.cineworldstrong.com/.
“Cineworld expects to operate its global business and cinemas as usual without interruption … throughout this process,” the company notice said, and “without disruption to its customers, vendors, suppliers or employees as much as practicable.”
“Cineworld is taking steps to position our company for the future,” Cineworld told customers via Twitter on Wednesday. “Our cinemas remain open around the world, and we continue to welcome guests to the 'Best Place to Watch a Movie.'”
Cineworld Group, based in the United Kingdom, described itself in the announcement as a leading cinema operator in 10 countries, including the United States, with 747 sites and 9,139 screens globally. How many of those will remain open next year, however, will depend on the planned restructuring of its debt and its many buildings.
“Cineworld expects to pursue a real estate optimisation strategy in the US and intends to engage in collaborative discussions with US landlords to improve US cinema lease terms in an effort to further position the Group for long-term growth,” the posted announcement said.
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Cineworld entered the Chapter 11 cases in the United States Bankruptcy Court for the Southern District of Texas with commitments for about $1.94 billion debtor-in-possession financing facility from existing lenders, according to the announcement. That will help to ensure Cineworld’s operations “continue in the ordinary course” while Cineworld reorganizes, it said, with expectations to emerge from Chapter 11 in the first quarter of 2023.
The movie-theater shutdowns and interruption in film schedules related to the COVID-19 pandemic were a major factor in the company’s financial woes, according to Cineworld CEO Mooky Greidinger, who called the past couple of years “an incredibly difficult time for our business.”
Will Cape Cod theaters stay open?
Managers at both Cape Cod theaters on Thursday said they were not allowed to comment on the bankruptcy filing, and James Lamere, manager at Regal Cape Cod Mall, referred all questions about future operations to Regal corporate officials contacted through social media channels.
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On Friday morning, Regal customer relations referred further questions via email to a media department email address but noted: "Regal is open for business as usual! We continue to welcome Regal Unlimited and Regal Crown Club members and our guests to our theatres. We are committed to our customers’ experience and to being the 'Best Place to Watch a Movie.'” The media department did not respond further on Friday.
Regal on Friday was advertising usual movie times at its Hyannis and Mashpee theaters, two of seven locations the company operates in Massachusetts. Besides continuing to keep theaters open as the Chapter 11 case plays out, the online announcement said, “The Group expects to continue to honour the terms of all existing customer membership programs, including Regal Unlimited and Regal Crown Club in the United States.”
The restructuring “will allow us to continue to execute our strategy to reimagine the most immersive cinema experiences for our guests through the latest and most cutting-edge screen formats and enhancements to our flagship theatres,” Greidinger said in the announcement.
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The company “will seek to implement a de-leveraging transaction that will significantly reduce the Group’s debt, strengthen its balance sheet and provide the financial strength and flexibility to accelerate, and capitalise on, Cineworld’s strategy in the cinema industry," the announcement said, but noted: "It is expected that any de-leveraging transaction will result in very significant dilution of existing equity interests.”
Cineworld acquired Regal Cinemas in 2018 for $3.6 billion, a mega-merger that reports at the time said would create the world’s second-largest cinema group after AMC. At the time, Regal was said to operate about three-quarters of Cineworld’s screens worldwide.
Besides the decline due to a lack of customers since the 2020 pandemic shutdown, Cineworld faces an unpaid $1 billion breach of contract fine from a Canadian judge after, in June 2020, it backed out of a deal to acquire the Canadian company Cineplex, according to reports.
Other movie theaters on Cape Cod and the Islands are independently owned. Bill Hanney, a part-time Brewster resident and owner of Entertainment Cinemas, recently announced a more than $1 million plan to renovate his South Dennis movie theater and Falmouth Cinema Pub to include reclining seats and more food and alcoholic drink options.
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Contact Kathi Scrizzi Driscoll at kdriscoll@capecodonline.com. Follow on Twitter: @KathiSDCCT.
This article originally appeared on Cape Cod Times: Cineworld, owner of Regal Cinemas on Cape Cod, files for bankruptcy
