Cineworld files for special in a bid to save business but cinemas remain open

0

The second largest cinema chain on the planet, Cineworld, has filed for special bankruptcy in the United States in a bid to buy time to restructure its business.

The company said Wednesday it had filed for Chapter 11 proceedings in the United States, but its movie theaters will remain open throughout the period.

It is designed to allow the debt-ridden channel to recover from its current woes, caused in part by the pandemic and the lack of popular recent films.

Cineworld owns and operates the Renfrew Street branch in Glasgow, the tallest cinema complex in the world.

Managing Director Mooky Greidinger said: “The pandemic has been an incredibly difficult time for our business, with the forced closure of cinemas and a huge disruption to movie schedules that has gotten us to this point.”

Although it sounds dramatic, Chapter 11 bankruptcies are quite different from other forms of reporting that a business has gone bankrupt. They mean that the company will be able to keep all its assets and trade normally for the time being.

Cineworld has announced plans to emerge from bankruptcy in the first three months of next year. He is “convinced that a comprehensive financial restructuring is in the interest of the group and its stakeholders, taken as a whole, in the long term”.

But it will be painful for shareholders, whose positions in the company risk being greatly diluted in the process. Its shares will continue to trade in London, Cineworld told investors.

Bankruptcy will give the company a chance to renegotiate with its owners in the United States and ask for better offers.

Mr. Greidinger said: “This latest process is part of our ongoing efforts to strengthen our financial position and is aimed at deleveraging that will create a more resilient capital structure and an efficient business.

“This will allow us to continue to execute on our strategy to reinvent the most immersive cinematic experiences for our guests through the latest and most advanced screen formats and enhancements to our flagship theaters.

“Our goal remains to further accelerate our strategy so that we can strengthen our position as the ‘best place to watch a movie’.”

The company added: “Cineworld and its brands around the world – including Regal, Cinema City, Picture House and Yes Planet – continue to welcome customers to cinemas as usual, which will not change during cases. of chapter 11.

“The group expects to continue to honor the terms of all existing customer membership programs, including Regal Unlimited and Regal Crown Club in the US and Cineworld Unlimited in the UK.”

Share.

Comments are closed.