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Cineworld, the owner of Regal Cinemas, confirmed on Monday it is considering filing for Chapter 11 bankruptcy in the U.S. and “associated ancillary proceedings in other jurisdictions” amid an ongoing evaluation of strategic options.
“Any such filing would be expected to allow the Group to access near-term liquidity and support the orderly implementation of a fully funded deleveraging transaction,” the movie theater chain said in an update on Monday. “Cineworld would expect to maintain its operations in the ordinary course until and following any filing and ultimately to continue its business over the longer term with no significant impact upon its employees.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CNWGY | CINEWORLD GROUP PLC | 0.115 | -0.07 | -39.47% |
The update comes after The Wall Street Journal reported on Friday that a possible bankruptcy filing could come “within weeks” and that Kirkland & Ellis LLP and AlixPartners have been tapped as advisors on the process. Cineworld, Kirkland & Ellis LLP and AlixPartners did not immediately return FOX Business’ request for comment.
Cineworld shares fell more than 50% on Friday following the Journal’s report.
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The consideration of Chapter 11 bankruptcy comes after Cineworld said last week that recent admission levels are below expectations despite a gradual recovery in demand since reopening its theaters in April 2021.
It expects the lower admission levels to continue through November 2022 due to a limited film slate.
Pedestrians walk past the entrance of a Cineworld cinema in London, on August 22, 2022. ((Photo by Susannah Ireland/AFP via Getty Images) / Getty Images)
Cineworld, which owns more than 500 movie theaters across the U.S., said any deleveraging transaction would result in a “very significant dilution of existing equity interests” in the company.
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Cineworld is the second-largest movie theater chain in the world behind AMC Theatres.
In a statement on Thursday, AMC Entertainment CEO Adam Aron said that while the company’s film slate for the third quarter of 2022 is expected to be “relatively weak,” the company continues to be “quite optimistic about the increasing demand” for its movie theaters in the fourth quarter of 2022 and calendar year 2023.
