Regal Cinemas owner Cineworld prepares for bankruptcy filing
The Wall Street Journal reported Friday that Cineworld, the world’s second-largest movie theater chain, is set to file for bankruptcy while facing $4.8 billion in debt.
Cineworld, the London-based parent company of US-based Regal Cinemas, has 751 branches and 28,000 employees in ten countries. It also operates cinemas under the name Picturehouse, Cinema City and Yes Planet. Based in Knoxville, Tennessee, the Regal Cinema chain operated 549 theaters with 7,200 screens in 2019, making it the second largest chain in the United States.
Cineworld’s share price fell more than 80% on the London Stock Exchange as news of the bankruptcy plans filtered through the investment community. The company is said to have hired Kirkland & Ellis to guide it through the liquidation process on both sides of the Atlantic, assisted by restructuring experts from AlixPartners.
Changes in cinema attendance due to the pandemic have been among the challenges facing Cineworld and other traditional movie theaters. CEO Mooky Greidinger had blamed the temporary suspension of blockbuster releases as contributing to his decision to close his theaters in New York and other major markets. However, Cineworld doesn’t seem to be weathering the storm as well as rival AMC Entertainment, which recently racked up its highest attendance stats since the pandemic.
Cineworld executives have yet to publicly comment on the company’s proposed bankruptcy filing. On Wednesday this week, the company said it was negotiating a possible financing or restructuring strategy, but warned shareholders of a risk of “very significant dilution” of their interests.
The Cineworld channel had been founded by Steve Wiener in 1995, with its first UK cinema opening the following summer. In 2004, it was acquired by private equity group Blackstone, which sold its interests in 2010. In 2017, Cineworld acquired US company Regal Cinemas for US$3.6 billion and, two years later, attempted to acquire Cineplex Entertainment, Canada’s largest group. movie theater chain, for US$2.1 billion, only for Cineworld to pull out of the deal.