British Land to vote against Cineworld restructuring - report
British Land Company
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17:15 09/09/24
British Land is reportedly considering voting against a restructuring of Cineworld's British operations that could lead to the closure of dozens of sites.
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According to Sky News, British Land is among a number of landlords dissatisfied with formal proposals tabled by the cinema giant.
Cineworld has confirmed plans to close six of its UK multiplexes, but documents circulated to creditors show almost 50 others are in categories requiring landlords to agree to revised rent deals in order to ensure their long-term viability.
Property industry sources told Sky that several Cineworld landlords were unhappy with the proposals as currently configured and were expected to press for an improvement of the terms.
British Land, which is understood to own four Cineworld sites, three of which would be compromised under the plan, declined to comment to Sky.
Last month, Sky report that Landsec and Legal & General were among the largest Cineworld landlords in the UK, although it was unclear on Wednesday how they planned to vote on the restructuring.
According to documents sent to creditors, 33 sites - categorised as Class B - "require a reduction of rent to ERV [Estimated Rental Value] Rent in order to place the sites on a viable long-term footing". A further 38 of Cineworld's cinemas would be unaffected, while another 16 Class C1 and C2 leases require reductions to either turnover rent or zero rent in order to render them financially viable.
They added that the company did not have sufficient funding to meet a quarterly rent bill on June 24 of £15.9m.
"The UK group did not have sufficient liquidity to make the June 2024 Rent Payment and required further funding from the US Group to meet this liquidity need.
"Absent this funding, the UK Group would have been insolvent on a cashflow basis."
A convening hearing has been scheduled to progress the restructuring plan later this month.
Cineworld said in a statement to Sky: "We anticipate that six cinemas will close as part of our Restructuring Plan.
"With the support of our landlords, the plan will enable us to deliver a cost base which supports a sustainable long term business serving audiences across the remainder of our estate."