Cineworld to file for bankruptcy after failing to rebuild attendance
Cineworld Group (CINE.L), is preparing to file for bankruptcy within weeks after struggling to rebuild attendance from pandemic lows, according to the Wall Street Journal.
Cineworld, which also operates Regal Cinemas in the United States, has engaged lawyers from Kirkland & Ellis LLP and consultants from AlixPartners to advise on the bankruptcy process, the report added.
The cinema chain said on Wednesday that the company could also be forced into a rescue deal as recent admission levels proved disappointing.
Investors reacting to the news sent the company’s market value plunging to less than £50m on Friday, having been valued at as much as £4.4bn before the pandemic all but destroyed the cinema industry.
The London-listed company is expected to file a chapter 11 petition in the United States and is considering filing an insolvency proceeding in the UK, the report said.
Cineworld is the world’s second largest cinema chain, and also owns the Picturehouse cinema chain in the UK.
Read more: FTSE: Cineworld plunges almost 60% as lack of blockbusters bites
The company admitted about 95 million cinema-goers in 2021, up 75% on the 54 million in 2020 but well below the 275 million who attended before the COVID pandemic.
It comes as a number of DC films including The Flash and Aquaman 2 have been pushed back to 2023 due to COVID production delays. Avatar: The Way of Water is also not set to premier until December this year after COVID-related issues delayed its release by over a year.
Cineworld, which is facing an almost $1bn payout for pulling out of a deal to buy its Canadian rival Cineplex, reported a $493m year on year increase in net debt to $4.8bn at the end of 2021.