Regal Cinemas owner could file for bankruptcy and vows to ‘business as usual’ – KION546

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By Mark Thompson, CNN Business

The owner of Regal Cinemas confirmed on Monday that he was considering filing for bankruptcy, but promised to “business as usual” as he tried to shore up his finances.

Britain’s Cineworld Group said in a statement that a “voluntary Chapter 11 filing in the US” was one of the options it was looking at in an attempt to reduce its debt burden.

Meanwhile, Cineworld and Regal cinemas were open for “business as usual”, he added, and would remain so.

“Cineworld would expect to maintain operations in the normal course until and after any filing and ultimately continue operations for the longer term without significant impact to its employees,” the company said in the statement. released in response to reports last week.

Cineworld shares crashed as much as 80% in London on Friday after the Wall Street Journal reported that the world’s second largest cinema chain had spoken to lawyers for Kirkland & Ellis LLP to advise them on the bankruptcy process in the US and UK.

Cineworld said earlier last week that despite a “gradual recovery in demand” since last spring, admissions were below expectations.

The company accused a limited list of movies for the lack of moviegoers, a situation which should continue until the end of November.

A Chapter 11 filing would give the company more time to restructure its debt and make a proposal in bankruptcy court, while continuing to operate. Many large US corporations have successfully used Chapter 11 to put their businesses on a stronger financial footing.

Cineworld, which owns more than 500 cinemas across the United States as well as Picturehouse Cinemas in the United Kingdom, reiterated on Monday that any “deleveraging operation” would result in a “very significant dilution of existing holdings” for Cineworld shareholders. .

“Cineworld’s evaluation of these strategic options is still ongoing. A further announcement will be made if and when appropriate,” he added.

The company struggled to stay afloat during the pandemic, when it was forced to close its movie theaters around the world. It suffered a loss of $2.7 billion in 2020 and $566 million in 2021.

It’s a similar story for other movie theaters. Despite a strong reboundU.S. box office revenue so far this year is nearly 30% lower than before the pandemic, according to Comscore, a media data firm.

Cineworld stock has rallied slightly since Friday’s rout, but is still trading nearly 60% below its closing level on Thursday.

Anna Cooban and Frank Pallotta contributed reporting.

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