The world’s second-largest theater chain is apparently headed toward bankruptcy.
According to the Wall Street Journal, Regal Cinemas owner Cineworld Group is preparing to file for chapter 11 bankruptcy in the United States and insolvency in the United Kingdom. “People familiar with the matter” say the London-based exhibitor has struggled to recover losses from the pandemic, when the vast majority of entertainment venues were forced to shut down.
The insiders claim Cineworld was hopeful it could win back moviegoers with a slate of 2022 blockbusters, including The Batman, Top Gun: Maverick, Thor: Love and Thunder, and Minions: The Rise of Gru; however, ticket sales were lower than anticipated. The company, which operates theaters around the world, said it didn’t expect to see admissions increase until the end of the year.
“Despite a gradual recovery of demand since re-opening in April 2021, recent admission levels have been below expectations,” the company wrote in an Aug. 17 statement. “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.”
The WSJ reports Cineworld has tapped Kirkland & Ellis LLP and AlixPartners consultants to assist with the bankruptcy filing, which will allow it to continue operations as it attempts to recoup. The company confirmed it will keep its theaters opened as it explores options to reduce its $4.8 billion debt.
“As we announced earlier this week, we are proactively evaluating strategic options to ensure we have the balance sheet strength and flexibility to adapt to market conditions, and that process remains ongoing,” the company said. “We are committed to our customers’ experience and to being the ‘Best Place to Watch a Movie.’”
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