Cineworld has filed for Chapter 11 bankruptcy
(Picture: PA Wire)Cineworld has filed for Chapter 11 bankruptcy in the United States.
The cinema chain, which operates in 10 countries including the United States and the UK, has 47 sites and 9,139 screens globally. It is the second largest such business in the world.
The UK business, which includes 127 cinemas and the Picturehouse brand, is not expected to be impacted by the bankruptcy filing. However in the US the business will begin talks with landlords about potential closures.
A Chapter 11 bankruptcy filing will let the firm stay in business while restructuring its debt.
The movie industry has been left reeling after the Covid pandemic led to the shuttering of most cinemas for months at a time.
While there have been breakout box office successes such as Top Gun: Maverick along with the Marvel hits Doctor Strange in the Multiverse of Madness and Thor: Love and Thunder, overall ticket sales are markedly down.
There are no no major high-profile releases scheduled for 2022 until Black Panther: Wakanda Forever and Avatar: The Way of the Water.
Flops this year include Moonfall, Lightyear, Morbius and The Northman. 3,000 Years of Longing was given a very wide US release but has already been dubbed a box office bomb.
Cineworld is creaking under a debt mountain of £7.5billion, almost 140 times its market cap of just £53.6million.
In a statement the chain said it has “commenced Chapter 11 cases in the United States Bankruptcy Court for the Southern District of Texas.”
The company added: “As part of the Chapter 11 cases, Cineworld, with the expected support of its secured lenders, will seek to implement a de-leveraging transaction that will significantly reduce the group’s debt, strengthen its balance sheet and provide the financial strength and flexibility to accelerate, and capitalize on, Cineworld’s strategy in the cinema industry. The group Chapter 11 companies enter the Chapter 11 cases with commitments for an approximate $1.94 billion debtor-in-possession financing facility from existing lenders, which will help ensure Cineworld’s operations continue in the ordinary course while Cineworld implements its reorganization.”
