(London) Cineworld Group, one of the world’s largest cinema chains, confirmed on Monday that it was considering filing for Chapter 11 bankruptcy protection in the United States and other similar actions elsewhere.
Posted at 12:32 p.m.
The British company, which owns Regal Cinemas in the US and operates in 10 countries, says bankruptcy is an option it is considering to help preserve a business that has struggled to recover from the impact of related restrictions to COVID-19.
Cineworld says it is in talks with key stakeholders such as lenders. She expects operations to proceed as normal after any filings and that “ultimately, (she) will continue her business for the longer term without significant impact on her employees”. It has about 28,000 workers, according to the company’s website.
Shares of the company fell 58% on Friday after the Wall Street Journal reported that the company was preparing to file for bankruptcy within weeks.
Cineworld, which has 9,189 screens at 751 locations, stressed on Monday that it was open for business and was still evaluating its options to increase cash flow and possibly restructure.
In March, the company announced that the COVID-19-related shutdowns in the first part of last year had taken their toll, reporting an after-tax loss of US$565.8 million and a debt of 4.8 million US. It also took a hit by ending its 2020 takeover of Canadian film company Cineplex Inc. An Ontario court agreed with Cineplex that the UK company had defaulted and awarded $1.23 billion ( US$947.5 million) in damages. Cineworld has appealed.
Despite the obstacles, Cineworld reports that pent-up demand to see movies on the big screen helped its bottom line late last year. He also expects blockbusters like ‘Top Gun: Maverick’, ‘Jurassic World: Domination’ and others to help him ‘keep bouncing back strong’.
Shares of AMC and Cinemark, two major U.S.-based movie chains, also fell ahead of the opening bell in New York.