LONDON (AP) – Cineworld Group PLC, one of the world’s largest movie theatre chains, said yesterday that it is considering filing for bankruptcy protection in the United States (US) and similar actions elsewhere.
The British company, which owns Regal Cinemas in the US and operates in 10 countries, said bankruptcy is one option it is weighing to help preserve a business that has struggled to rebound from the impact of COVID-19 restrictions.
Cineworld said it’s holding talks with major stakeholders such as lenders. It expects operations to run normally following any filing and “ultimately to continue its business over the longer term with no significant impact upon its employees.” It has about 28,000 workers, according to the company’s website.
Company shares tumbled 58 per cent on Friday after The Wall Street Journal reported that the company was preparing to file for bankruptcy within weeks.
Cineworld, which has 9,189 screens across 751 sites, said yesterday that it’s open for business and is still evaluating its options to boost cash flow and potentially restructure. In March, the company said COVID-19 closures in the first part of last year took a toll, reporting a USD565.8 million loss after taxes and debt of USD4.8 million.
It also took a hit from terminating its 2020 takeover of Canadian movie theatre company Cineplex Inc.
A court in Ontario agreed with Cineplex that the British company breached its obligations and awarded CAD1.23 billion in damages.
Despite the hurdles, Cineworld has said pent-up demand to see movies on the big screen helped its bottom line at the end of last year.
Shares of US theatre chains AMC and Cinemark also fell before the opening bell in New York.