UK movie chain Cineworld files for Chapter 11 bankruptcy in U.S. - Action News
Home WebMail Friday, November 22, 2024, 04:32 PM | Calgary | -10.8°C | Regions Advertise Login | Our platform is in maintenance mode. Some URLs may not be available. |
Business

UK movie chain Cineworld files for Chapter 11 bankruptcy in U.S.

Britain's Cineworld Group said on Wednesday it had filed for bankruptcy protection in the United States as the world's second-largest cinema chain operator struggles to find other ways to restructure its debt-laden balance sheet.

British chain is second largest theatre operator in the world

Cineworld is the second-largest operator of theatres in the world, but despite the chain's size, it is undergoing bankruptcy proceedings in the U.S. (Naomi Baker/Getty Images)

Britain's Cineworld Group said on Wednesday it had filed for bankruptcy protection in the United States as the world's second-largest cinema chain operator struggles to find other ways to restructure its debt-laden balance sheet.

The Chapter 11 filing, which can allow a company to stay in business and restructure its debt, involves Cineworld's U.S., UK and Jersey businesses.

The Regal cinemas owner has repeatedly warned that any deleveraging transaction would lead to very significant dilution of existing equity interests.

While the cinema industry has been struggling to recover from the pandemic, which has led to fewer blockbusters, lower theater attendance and increased popularity of streaming, Cineworld's specific issue is the amount of debt it has amassed over the years.

WATCH| How movie chains are trying to pivot their way out of the pandemic:

Movie theatres under pressure to modernize in order to survive

2 years ago
Duration 2:05
As film audiences move from cinemas to streaming, there's a push in the movie theatre industry to change how it operates to get people in seats.

The company took on debt to fund part of its $3.6 billion US purchase of Regal in 2017, and more to survive the pandemic. It was poised to merge with Canada's Cineplex in 2019, before that deal fell apart.

Its net debt including lease liabilities stood at $8.9 billion at the end of 2021. Excluding lease liabilities, its net debt was $4.84 billion at that time. The company's market value was just $62 million USat Tuesday's close.

Cineworld operates more than 9,000 screens across 10 countries and employs around 28,000 people.