Hanley Cineworld survives as five branches to shut and administration staved off
Entertainment giant Cineworld is retaining its Stoke-on-Trent cinema. The cinema - within The Hive, in Hanley - opened in December, 2015.
It comes as Cineworld has staved off the threat of administration after a High Court judge approved restructuring plans for four of its companies. Cine-UK Ltd, Cineworld Cinemas Ltd, Cineworld Cinema Properties Ltd and Cineworld Estates Ltd, all part of the UK branch of the world's second-biggest cinema chain, were on the brink of collapse without the approval, the court was told.
The approval means that £16 million of fresh equity from their indirect parent company will be injected to meet immediate financial needs, with an additional potential £35 million in the pipeline. The deal also includes renegotiating leases for more than 100 sites, although five sites are earmarked for closure as they're deemed 'commercially unviable'.
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Mr Justice Miles approved the restructuring on Monday, noting in his written judgment that 'the court should exercise its discretion in favour of sanctioning the plans'.
Previously, the London court heard that these four companies, which operate 101 cinemas and employ 4,401 people, are part of a larger group with venues in 10 countries, including the US under the Regal Cinemas banner. However, their barrister, Tom Smith KC, highlighted that the firms are 'presently unprofitable', having been hit hard by the Covid-19 pandemic and last year's strikes by screen actors and writers.
Mr Smith revealed that the US branch of the chain had supplied the UK firms with approximately $65 million to enable it to continue trading until the end of June this year, with rent costing £19million also covered on the condition that the company would undergo a restructuring. The barrister added that the US branch had also agreed to pay £16.7 million in rent due for the three months up to the end of September as there was 'no prospect of raising the money from anywhere else'.
Mr Justice Miles also rejected an attempt by the landlords of four sites, the Crown Estate and UK Commercial Property (UKCP), to obtain an injunction preventing the companies from renegotiating the leases of the sites. The two bodies argued that agreements last year stopped the leases from being renegotiated, with their barrister Ben Shaw KC alleging the restructuring would bring "adverse consequences".
A Cineworld spokesman told The Mirror: "We are pleased that the court has approved our restructuring plan. This will enable us to re-set the business for the long-term and ensure a sustainable future for Cineworld in the UK."
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