Cineworld is moving forward with its Chapter 11 Bankruptcy filing in the U.S.
Following on from a report in August, Cineworld is moving forward with a bankruptcy filing in the United States. The U.K.-based company operates the Regal Cinemas chain in the U.S.
“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 company said in a statement. “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.”
The company flirted with insolvency in Nov. 2020, but eventually found a funding source that would take it through Spring 2021. As the world began to return to movie theaters, the chain was hopeful of recovery, but then was hit again by customers not returning as fast as had been hoped, and then the studios haven’t had as much product as was hoped due to backlogged effects houses.
Cineworld Chief Executive Mooky Greidinger told The Wall Street Journal in August that the company hadn’t had the same benefits as the AMC stock being salvaged by investors from Reddit. “I think what happened to them is a very good thing for AMC. And you know, we are traded in the U.K. market. Not every stock in the U.S. market is a meme stock. And I think that AMC did well with it,” he said. “They handled the situation in a good way. And I think that investors will see the conduct of the industry and will see the way we are performing, and we will see this in our share price. Are we going to become a meme stock? I don’t think so.”
“There are pluses and minuses in every thing in life. I will not give you a straight answer. Of course I would love my shares to be much higher than they are today. But you know, in everything like this there is also an element of risk,” Greidinger said. “I am happy for AMC that they are doing well. At the end of the day, with all of the competition in the industry, I don’t think that any industry wants to see one of the huge players of the industry falling down. This isn’t positive news for anyone.”
Cineworld has said it’s looking to exit bankruptcy as soon as possible, but no firm timeline was given.