As many as 128 cinemas in the UK could be at threat of closing after it was revealed Cineworld is preparing to file for bankruptcy with weeks.
Thousands of jobs in the UK could be at risk after weeks of bad news for Cineworld including a tumbling share price. Shares have fallen by more than 81% to a record low of 1.8 pence, with the company expected to file for insolvency in the UK.
A similar 'chapter 11' petition is also set to be filed in the US, The Wall Street Journal reports. The Cineworld Group is the second largest cinema chain in the world with 751 sites and 9,189 screens across the globe.
Between 1,000 and 5,000 people are estimated to work in the UK company, which has over 1,000 screens in the UK at sites from Aberdeen to York, Sheffield, London and Dover, among many others.
The company said recently: "Despite a gradual recovery of demand since re-opening 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."
As well as the UK and Ireland, the company operates in the US, Poland, Romania and Hungary among others. They are also the owners of Pictureworld in the UK and Regal Cinemas in the US.
Founded in 1995, the company went public in 2006, listing on the London Stock Exchange a year later and currently boasts around 28,000 employees worldwide.
It was reported earlier this month that rescue talks were being held to help the stricken company, continuing to suffer from a downward trend in cinema attendance since the pandemic and the reliance on streaming sites like Netflix, Amazon Prime and Disney+.
Despite this, it insisted that a restructuring 'likely result in very significant dilution of existing equity interests in Cineworld."
The British company has brought in lawyers from Kirkland & Ellis LLP with consultants from AlixPartners to advise on the process.
Things have been tricky for the company for some time and on Wednesday its shares plunged more than 60% after it warned audience numbers have been weaker than expected, with a limited number of film releases not helping.
Shares in the company fell from 12.56p to 8.24p by the time markets closed.
It is reported to have built up debts of £3.95 billion of debt by the end of the last financial year, while blockbuster films like Tom Cruise's Top Gun: Maverick did little to help the situation.
By the end of 2021, net debts were at roughly £7.3 billion, with lease liabilities of around £4 million
Cineworld has declined to comment so far.
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