CINEWORLD is preparing to file for bankruptcy “within weeks”, putting 128 UK and Ireland cinemas at risk.
The world’s second biggest cinema chain made the decision after struggling with attendance following the coronavirus pandemic, the Wall Street Journal reports.
The company has hired lawyers and consultants to advise on the bankruptcy process.
The company, which also owns the Picturehouse chain in the UK and Regal Cinemas in the US, had pinned its hopes on releases such as Top Gun: Maverick, The Batman and Thor: Love And Thunder to aid its recovery from the heavy impact of the pandemic.
However, it told the London Stock Exchange on Wednesday: “Despite a gradual recovery of demand since reopening in April 2021, recent admission levels have been below expectations.
“These lower levels of admissions are due to a limited film slate that is anticipated to continue until November 2022 and are expected to negatively impact trading and the group’s liquidity position in the near term.”
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The business, which was left with 4.8 billion dollars (£4 billion) of debt at the end of the last financial year, said it was considering restructuring its balance sheet to protect its future.
Shares in the company slid by as much as 81 per cent before trading down 6p, or 62 per cent, to 3.9p in afternoon trading on the London stock exchange.
The company is now worth just £133.9 million, a fraction of the £4 billion of debt it racked up during the pandemic.
The cinema chain is working with advisers at Alix Partners, PJT Partners, Kirkland & Ellis and Slaughter & May on a restructuring that could come in days.
The London-based chain narrowly escaped bankruptcy in 2020.
But it was handed a lifeline after creditors stepped in to help.
The UK-founded company also owns cinemas under the Regal Cinema brand in the USA.
It acquired the Regal chain in 2018 for $3.6 billion and was founded in the UK in 1995.
A Cineworld spokesman declined to comment and said there was “nothing more to add beyond our statement on Wednesday”.
It comes after a number of retailers went into administration this year following the impact of coronavirus and reduced consumer spending.
Frasers Group, which owns House of Fraser, Sports Direct and Evans Cycle, bought digital retailer Studio Retail Group earlier this year.
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Cinema company Vue International was involved in a £1billion restructuring deal earlier this month.
And a number of energy firms struggling
