Cineworld’s future is in doubt as the ailing British cinema chain files for bankruptcy in the US
Cineworld’s future was cast in doubt yesterday after it filed for bankruptcy in the US after weeks of speculation about its finances.
The ailing cinema chain said it has filed for Chapter 11 bankruptcy protection, which will allow it to continue operations and protect it from lenders while it tries to restructure the business.
The British group had pinned their hopes on blockbusters like Top Gun: Maverick, The Batman starring Robert Pattinson and Zoe Kravitz and Thor: Love And Thunder to help their recovery from the Covid-19 pandemic, but viewership numbers were far below expectations .
Bad: Cineworld had hoped films like The Batman, starring Robert Pattinson and Zoe Kravitz (pictured), would boost business, but viewership fell short of expectations
As a result, the company, which employs around 28,000 people worldwide and operates 751 cinemas in 10 countries, including 127 in the UK, is seeking to “significantly” reduce its massive £7.5 billion in debt.
But it warned that any transaction would likely result in “very significant dilution” for its investors, who could see many of their positions wiped out entirely.
Despite this, Cineworld shares were expected to continue trading in London, while cinemas around the world would remain open and continue operating normally during the process.
But shares have fallen over the past two years after it entered the pandemic with huge debt and then was forced to close its cinema complexes for months.
And the collapse threatens to completely wipe out the interests of CEO Mooky Greidinger and his brother Israel, who together own just over 20 percent of the group through their family vehicle Global City.
Despite filing for bankruptcy, Cineworld appeared optimistic, predicting that it would emerge from Chapter 11 within the first three months of next year and that the process was “in the best interests” of the company and its investors.
