Cineworld, the world's second-largest cinema operator, is staring at a possible bankruptcy filing as it struggles to cut debts that soared during the pandemic, it warned today.
The owner of Regal cinemas in the US, which had $8.9 billion of net debt at the end of 2021, said last week a lack of blockbusters was keeping movie-goers away and impacting its cash flows.
Cineworld has cinemas in Dublin and Belfast.
The UK-based company, which is also still reeling from the failed takeover of a Canadian rival, had a market value of just £56m at Friday's close.
It had already said it was looking at ways to potentially restructure its balance sheet, and said today one option was a voluntary Chapter 11 bankruptcy filing in the US.
Shares of the London-listed company plunged to a record low on Friday after the Wall Street Journal first reported the potential move.
"Cineworld would expect to maintain its operations in the ordinary course until and following any filing," it said today.
The company said it was in talks with many of its major stakeholders, including lenders and legal and financial advisers, and reiterated any deleveraging transaction would lead to very significant dilution of existing equity interests.
Having survived the Covid pandemic, a near-term shortage of big-budget films and the popularity of online streaming are threatening its recovery.
AMC Entertainment also flagged a tough third quarter due to a slim film slate.
Cineworld, which two years ago abandoned a plan to take over rival Cineplex, is also in the middle of a legal dispute with the Canadian company, which has sought C$1.23 billion ($946m) in damages for walking away from the deal.
Read more
Cineworld - from chasing deals to turning off screens
Over the years, Cineworld has expanded globally via acquisitions, including its $3.6 billion purchase of Regal Entertainment in 2017.
The company has payment obligations to disgruntled former shareholders of Regal, further straining its finances.
Cineworld's shares were volatile in early deals, trading at about 4.3 pence. That compares with a peak of more than 310 pence in 2017.
