Cineworld, teetering under heavy debt and facing falling box office receipts this quarter, insisted on Friday that the giant theater chain is normal as it explores options.
The announcement follows today’s news that the UK-based parent company of Regal Cinemas is preparing to file for bankruptcy. Cineworld announced a potential Chapter 11 earlier this week, citing “active discussions with various stakeholders” as it evaluates “various strategic options both to obtain additional liquidity and to potentially restructure its balance sheet through a global deleveraging operation.”
“All of our Cineworld and Regal cinemas are open as usual and we continue to welcome guests and members to our theaters around the world,” Cineworld added today.
“As we announced earlier this week, we are proactively evaluating strategic options to ensure we have the strength of the balance sheet and the flexibility to adapt to market conditions, and this process continues.” We are committed to the experience of our customers and to be “the best place to see a movie”.
High debt, combined with soft box office returns and possibly a possible payout from Cineplex Canada, is holding him back. A Canadian court awarded Cineplex a $ 1 billion ruling for breach of a contract lawsuit.
Nobody believes that failure means goodbye to Cineworld, a much more refined and orderly chain. Alamo Drafhouse (albeit a very narrow circle) is rapidly expanding and shaping a new kind of post-Covid theater experience since it came out of bankruptcy a year ago.
The exhibitor has a history of bankruptcy. In the early 2000s, Regal merged with United Artists and Edward Theaters when they all went bankrupt after a period of massive over-expansion.
“We have seen cuts like this in the past. This is not the death of the exhibition industry, “said an industry executive.
The Chapter 11 speech, first reported in the WSJ, hit film stocks hard, rightly or wrongly. Worst to Best Today: National Cinemamedia down 8.7% to $ 50; AMC Entertainment fell 7% to $ 17.91; Cinemark was down 4% to $ 16.35 and Imax and Marcus were down 3.2% to $ 15.76 and 1.61% to $ 17.25, respectively.
AMC is also seeing a drop in Mem shares today after iconic retail investor Ryan Cohen abruptly abandoned his stake in another of them, Bed Bath & Beyond. AMC has repeatedly avoided bankruptcy in the wake of Covid, but its cash position has now strengthened significantly and on Monday it will begin trading in a new class of securities called APES.
The end of the theatrical world quickly appears full of trouble.
“The conversation is very exaggerated. There will be a renovation. Cineworld does not go away. Some poor performing theaters will be closed. These resources are probably not that interesting for others to go in and take. Cineworld will retain its best assets and the impact on the industry will likely be minimal, “said MKM Partners analyst Eric Handler.
“I think we need to see how big of a change the lenders want.” They may force some theaters to be sold. “They might try to break up the business and try to spin off Regal,” she said.
He and others have said Cineworld is risking bankruptcy because it overexposed its balance sheet with Regal, which it acquired in 2017 for $ 3.6 billion, meaning it’s company-specific.
“AMC is very liquid. Same with Cinemark and Marcus. The risk of these three failing in the near future is very, very, very low. “What’s happening with Cineworld is very counterproductive because of their capital structure,” Handler said.
Imax and National Cinemamedia potentially have greater visibility thanks to the Imax screens set up near the Regal theaters. But restructuring the bankruptcy means closing the most unproductive theaters and usually there are no Imax auditoriums.
AMC executives, Cinemark and Marcus recently acknowledged the current lack of new general release studio products, but indicated in the earnings call that they could withstand an August-September drought caused by post-production delays. This year has shown that audiences are more willing to return to the cinema. Downtime will decrease black adam, Black Panther: Wakanda forever Y Avatar: The way of water It comes out in October, November and December.
Source: Deadline
I am Anne Johnson and I work as an author at the Fashion Vibes. My main area of expertise is beauty related news, but I also have experience in covering other types of stories like entertainment, lifestyle, and health topics. With my years of experience in writing for various publications, I have built strong relationships with many industry insiders. My passion for journalism has enabled me to stay on top of the latest trends and changes in the world of beauty.
