Cineworld (LON:CINE)
The owner of Regal Cinemas, Cineworld (LON:CINE), announced on Monday that the company is currently assessing its strategic options and may file for Chapter 11 bankruptcy in the United States and “related ancillary processes in other jurisdictions.”
On a Monday update, the movie company stated “Any such filing would be expected to allow the Group to obtain near-term financing and facilitate the orderly implementation of a fully funded deleveraging transaction.” “Cineworld is looking at a scenario where it keeps running as usual up until and beyond any filing while operating its business over the longer term without significantly impacting upon its workers.”
The update comes after The Wall Street Journal reported on Friday that Kirkland & Ellis LLP and AlixPartners have been appointed as advisors on the process and that a potential bankruptcy petition may occur “within weeks.” Following the Journal’s story, Cineworld’s shares fell by more than 50% on Friday.
Since the reopening of its cinemas in April 2021, admissions remain below expectations and the decreased traffic is expected to endure as we approach December. Any deleveraging transaction, according to Cineworld, which controls more than 500 cinemas nationwide, would cause a “quite large erosion of existing equity holdings” in the business. After AMC Theatres, Cineworld is the second-largest chain of movie theaters worldwide.
Although the company’s film lineup for the third quarter of 2022 is anticipated to be “relatively weak,” AMC Entertainment CEO Adam Aron said in a statement on Thursday that the company is still “quite optimistic about the increasing demand” for its movie theaters in the fourth quarter of 2022 and the entire year 2023.
Cineworld has more than 28,000 employees globally and also controls the UK’s Picturehouse chain. Just like other movie theater businesses, Cineworld suffered greatly from the pandemic. The extreme nature o social distance laws forced several theaters to close for protracted periods of time during the lockdowns or operate at a reduced capacity.
The latest Bond movie, Top Gun: Maverick, and Thor: Love And Thunder were among the blockbusters that theater owners had hoped would entice customers back when lockout restrictions were relaxed. However, this does not seem to have helped much.
Featured Image: Megapixl @Rogerputting
Author Jowi Kwasu 
