UFA-Theater GmbH und Co. KG, Germany's third-largest cinema chain with 234 screens, has filed for insolvency.
According to a press statement, UFA was been forced to take this step because of 'the national drastic fall in admissions in the past months and the concomitant worsening of the liquidity situation.' The company's 38 cinemas are expected to continue operations unimpeded despite the insolvency proceedings.
The threat of insolvency became reality last April after the chain's bank HypoVereinsbank declined to provide further financing following two years of restructuring (Screendaily, April 2002). UFA spokesman Uwe Kattwinkel had confirmed at the time that the chain needed an additional Euros 3m to compensate for a drop in business in the traditionally quiet summer months, but stressed that UFA's 'restructuring [had] proceeded more successfully than we thought'. In fact, the chain had registered an operating loss of only Euros 250,000 instead of the originally expected Euros 1.5m-2m in 2001 after a streamlining programme which saw the closing of 40 cinemas.
Meanwhile, Volker Riech, managing director of UFA-Theater AG, which administers the properties housing the UFA cinemas, pointed out in a separate press release that his company is not affected by the chain's insolvency.