Cineworld, owner of Regal, sues Chapter 11 cases in Texas bankruptcy court

Posted: September 8, 2022

Photo by Aditya Vyas via Unsplash

Cineworld, owner of Regal, sues Chapter 11 cases in Texas bankruptcy court

By the Movieguide® team

Accumulating debt, accentuated by the COVID-19 pandemic, has forced Cineworld Group, owner of Regal Cinemas in the United States, to pursue Chapter 11 cases in the United States Bankruptcy Court for the Southern District of Texas.

“As part of the Chapter 11 cases, Cineworld, with the expected support of its secured lenders, will seek to implement a deleveraging operation that will significantly reduce the group’s debt, strengthen its balance sheet and provide the necessary financial strength and flexibility. to accelerate, and capitalize on, Cineworld’s strategy in the motion picture industry,” a statement from Cineworld bed.

“The Group’s Chapter 11 companies are entering Chapter 11 business with commitments for a debtor-in-possession financing facility of approximately $1.94 billion from existing lenders, which will help ensure that the operations of Cineworld will continue in the normal course as Cineworld implements its reorganization,” the statement continued. .

Cineworld also announced a plan to “pursue a strategy of real estate optimization in the United States and intends to engage in collaborative discussions with US landlords to improve rental terms for US theaters in an effort to further position the group for long-term growth”.

The announcement concluded that global and US operations and business would continue despite their debt.

Variety reported:

The company recorded a pre-tax loss of $708.3 million for the full year ending December 31, 2021, a marked improvement from the loss of $3 billion in 2020. However, the group’s net debt , excluding lease liabilities, increased by $492.7 million, from $4.33 billion to $4.84 billion. In July 2021, Cineworld secured $200 million in additional cash through additional loans.

“We have an incredible team across Cineworld laser who are focused on evolving our business to thrive during the movie industry’s comeback,” said Cineworld CEO 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 times that has gotten us to this point.”

“This latest process is part of our ongoing efforts to strengthen our financial position and targets a deleveraging that will create a more resilient capital structure and an efficient business. This will allow us to continue executing our strategy to reinvent the most immersive cinematic experiences. for our guests with the latest and most advanced screen formats and enhancements to our flagship cinemas. Our goal remains to further accelerate our strategy so that we can strengthen our position as the best place to watch a movie.” continued Greidinger.

Cineworld has 9,139 screens worldwide.

Although many major cinema chains are suffering from debt and a lack of blockbuster films as the box office shifts from the summer season to the fall, Movieguide® has previously reported that independent cinemas are not also nervous about income issues:

Despite initial concerns from AMC and other major movie chains about the lack of impending blockbusters for the fall box office, smaller exhibitors are less worried.

As Cineworld Group, owner of Regal Cinemas, faces bankruptcy, other cinema chains with less debt have said the traditionally slow months of August, September and October are not a problem thanks to the help of films of art and testing.

“It’s a slower than normal slow period, but it’s not a catastrophic crater,” said Tim League, Executive Chairman and Founder of Alamo Drafthouse.

Jeff Brein, managing partner of Far Away Entertainment, said he would likely cut schedules and staff for the coming months to try to cut costs.

“We don’t have much control over what the studios give us and when they give it to us. All we can do is control our operations and react and respond accordingly,” Brein said.

“I’m really not alarmed or losing a lot of sleep on the slate, as it is, for us and for the industry,” Brein added.

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