Cineworld prepares to file for bankruptcy

Cineworld, the second largest exhibition in the world and owner of Regal Cinemas, is preparing to file for bankruptcy in a few weeks. The Wall Street newspaper.

The London firm has hired attorneys from Kirkland & Ellis LLP and consultants from AlixPartners to advise on the bankruptcy process, according to the publication. Cineworld, which operates 751 sites in 10 countries, including the UK’s Picturehouse boutique chain, is expected to petition under Chapter 11 in the US and consider filing for bankruptcy in the UK, according to the report.

The Cineworld share price fell more than 50% on news of a possible bankruptcy.

The news comes just days after the company said it was “in active discussions with various stakeholders and is considering various strategic options for obtaining additional liquidity and potentially restructuring its balance sheet through a global deleveraging operation.”

The company attributed lower-than-expected admission rates to the lack of blockbuster films for the collapse of the business.

“Although there has been a gradual pick-up in demand since reopening in April 2021, recent admission levels have been lower than expected,” the company said. “This low level of attendance is due to the limited film, which is expected to run until November 2022 and should have a negative impact on the group’s liquidity and commercial position in the short term.”

Responding to reports, BECTU Director Philippa Childs said: “This is very worrying news, particularly for workers at Cineworld and Picturehouse in the UK who have already had a turbulent period during the pandemic. The UK film industry has experienced tremendous success as a result of Covid-19 and this latest news will be very concerning for cinema workers.

The statement read: “We will do everything possible to support our members during this difficult time and we will seek Cineworld to mitigate the impact of any failed transaction on its employees.”

The show was one of the hardest hit in the industry, as COVID forced cinemas to close in a painfully unstable and protracted period for seniors, workers and audiences alike. Cineworld is not alone in evaluating its own future. Vue International is restructuring and AMC is maneuvering to reduce the risk of survival.

In March, Cineworld posted 2021 revenue of $ 1.805 billion. Operating profit also returned to $ 15.8 million from a loss of $ 2.258 billion in 2020. Overall, the group recorded a pre-tax loss of $ 708.3 million in the year hit by Covid, when cinemas they were closed for most of the first half.