British Land considers opposing Cineworld restructuring plan
Cineworld’s proposed restructuring plan may be opposed by British Land, which has a number of the cinema chain’s venues in its portfolio.
The REIT is among a number of landlords unhappy with formal proposals put forward by Cineworld, Sky News has reported.
Cineworld has already confirmed the closure of six sites, however documents given to creditors revealed that around 50 venues require their landlords to agree to revised rent agreements in order to secure their future.
According to the documents, 33 of Cineworld’s sites require a reduction in rent to estimated rental value, 38 would be unaffected, whilst 16 would require a reduction to either turnover rent or zero rent.
They added that the chain did not have sufficient funding to meet a quarterly rent bill of £15.9m on 24 June.
Property industry sources told Sky News that a number of landlords are dissatisfied with Cineworld’s terms as they are laid out, and are expected to push for improved terms.
British Land owns four Cineworld sites, three of which would be compromised under the proposals.
Last month, it was reported that the cinema chain had been in talks with landlords – including British Land and Legal & General – regarding its restructuring plan.
Cineworld – which trades from over 100 sites nationwide – had initially held talks with prospective buyers about a potential sale of the business, but has since switched its focus to a restructuring process.
Should a sufficient number of landlords refuse to agree with the proposals, rival cinema chains are expected to take over some of Cineworld’s sites.
The cinema chain delisted from the London Stock Exchange last August, after its share price plummeted amid fears for its survival. This came following an administration process which saw Cineworld’s shareholders miss out on any recovery.