Debt-laden Cineworld admits it is considering bankruptcy as it struggles under the weight of a £7.5bn debt pile
- The troubled cinema chain, worth less than £50m, warned last week it was in survival talks amid a lack of blockbusters and weaker than expected sales
- Cineworld said yesterday options include a Chapter 11 bankruptcy filing, which would let it stay in business while restructuring its debt
- The filing would protect it from its lenders while bosses negotiate a rescue deal
Cineworld admitted it is considering filing for bankruptcy in the US as it struggles under the weight of a £7.5bn debt pile.
The troubled cinema chain, worth less than £50m, warned last week it was in survival talks amid a lack of blockbusters and weaker than expected sales.
Cineworld said yesterday options include a Chapter 11 bankruptcy filing, which would let it stay in business while restructuring its debt.
Cineworld admitted it is considering filing for bankruptcy in the US as it struggles under the weight of a £7.5bn debt pile
The filing would protect it from its lenders while bosses negotiate a rescue deal.
The business said its cinemas are ‘open for business’ and the filing would not have a significant impact on its employees or operations. But it did not rule out potential closures in the UK.
Cineworld also warned shareholders would take a ‘very significant’ hit, raising the prospect they could be wiped out. Shares fell 21.4 per cent, or 0.87p, to 3.2p, having traded above 300p before the pandemic struck.
Cineworld, which has 127 branches in the UK and also owns the Picturehouse chain, is still reeling from the shock of the coronavirus crisis which forced cinemas closed.
It had hoped to bounce back this year but its recovery has stalled because of the drought of big budget films, despite the success of Jurassic World: Dominion, Baz Luhrmann’s Elvis and Top Gun: Maverick, the latter taking more than £1bn at the box office.
The company said the weaker slate of films will continue until November, when scheduled releases include Black Panther: Wakanda Forever, Pinocchio starring Tom Hanks and Avatar: The Way Of Water the following month.
Cineworld is also facing hundreds of millions of pounds in legal fees over past deals including a £141m settlement over its takeover of US chain Regal and a potential £700m payout over its botched purchase of Canadian rival Cineplex. Interactive Investor head of investment Victoria Scholar said last night that Cineworld had been ‘destroyed by the pandemic’.