Cineworld Group, owner of Regal Cinemas, is preparing to file for Chapter 11 bankruptcy protection in the US. Wall Street Journal reported on Friday.
Cineworld executives did not directly comment on the media report, instead noting that THR The company said in an Aug. 17 statement that it was considering unspecified strategic options as it struggled to overcome Hollywood’s summer woes at its theaters.
Bankruptcy protection would offer the indebted exhibitor the opportunity to maintain operations, providing the capital needed to rebuild box office receipts from the COVID pandemic.
The magazine said that Cineworld engaged the law firm Kirkland & Ellis LLP and AlixPartners consultants to help prepare its bankruptcy protection application. Cineworld is expected to file Chapter 11 in the US and consider UK insolvency proceedings, according to the report.
On Wednesday, Cineworld said its admissions levels fell short of expectations. They are due “to the restricted film, which is expected to last until November 2022 and is expected to have a negative impact on the group’s commercial and liquidity position in the short term”, he added.
“Any deleveraging transaction will likely result in a very significant dilution of the existing equity stake in Cineworld,” said the second largest exhibitor.
After a strong recovery at the box office in the first half of 2022, major exhibitors are looking for a boost that could stagnate in the second half due to the absence of the big Hollywood marquees after the show. Top Gun: Maverick s Minions: The Rise of Gru.
Cineworld has been heavily in debt for years. Like many rival exhibitors, it had a particularly difficult time with the mountain of debt stemming from the coronavirus pandemic. It needed fresh capital to keep operations running.
Its net debt would be around $5 billion by the end of 2021. In July 2021, the company obtained an additional $200 million loan from a group of its existing creditors and agreed to contractual changes to some of its lines. existing credit facilities, including loan reduction. Minimum liquidity requirements and restrictions on the use of cash.
Source: Hollywood Reporter
Camila Luna is a writer at Gossipify, where she covers the latest movies and television series. With a passion for all things entertainment, Camila brings her unique perspective to her writing and offers readers an inside look at the industry. Camila is a graduate from the University of California, Los Angeles (UCLA) with a degree in English and is also a avid movie watcher.
