Cineworld Group PLC, the owner of Regal Cinemas, is preparing to file for bankruptcy, the Wall Street Journal reported on Friday, citing people familiar with the matter.
The British cinema chain operator is expected to file a chapter 11 petition in the United States and is also considering insolvency proceedings in the United Kingdom, the report said.
The news comes just days after Regal Cinemas’ owner warned that a lack of blockbusters would hit its liquidity in the near term.
Shares of London-listed Cineworld, the world’s second-largest cinema chain operator, slumped more than 81% to a record low of 1.8 pence.
The Regal Cinemas’ owner, which operates in 10 countries, including the US and UK, on Wednesday warned that a lack of big-budget movies was hitting admissions and would likely persist until November, potentially complicating efforts to cut debt.
At the end of 2021, the cinema chain’s net debt stood at $8.9 billion, including lease liabilities of $4.84 million, with cash and restricted cash of $354.3 million.
Cineworld is also facing payment obligations to former shareholders of its US division Regal and a potential multimillion-dollar fine in a dispute with Canada’s Cineplex.
The company has engaged lawyers from Kirkland & Ellis LLP and consultants from AlixPartners to advise on the bankruptcy process, the WSJ reported.
Picture Credit: Variety
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