Aug 19, 2022
Cineworld plans U.S. bankruptcy to manage debt amid weak sales
, Bloomberg News
Cineworld appealed Ontario court ruling after failed tie-up with Cineplex
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Movie theater chain Cineworld Group Plc is weighing filing for bankruptcy protection in the US in the coming weeks after a slow recovery in ticket sales dented the company’s finances, according to people with knowledge of the situation.
The British chain operates Regal Cinemas in the US and hundreds of other locations. It’s in negotiations with certain lenders around a restructuring plan that could end in bankruptcy, said the people, who asked not to be named because talks are private. Discussions aren’t final and could change based on the talks, they added.
A representative for Cineworld declined to comment on the potential bankruptcy, and referred to a statement Wednesday when the company said it was considering restructuring options. Reorg first reported on the bankruptcy filing plans.
Cineworld shares plunged as much as 82 per cent on Friday to their lowest price since they were listed in 2007.
SHORING UP
The company is working with law firm Kirkland & Ellis, the people said. It said this week that it was considering restructuring its debts and was embarking on cost-cutting measures to shore up its balance sheet.
Invesco Ltd. and State Street Corp. are among the biggest creditors to Cineworld, according to data compiled by Bloomberg. Centerbridge Partners and Eaton Vance are also lenders, some of the people said.
Some lenders are working with financial adviser Houlihan Lokey Inc. as they consider providing bankruptcy financing to the firm, according to the people.
Representatives for Kirkland & Ellis, Houlihan Lokey, Eaton Vance and Centerbridge declined to comment. Representatives for Invesco and State Street didn’t return calls and emails requesting comment.
Cineworld, the world’s second-largest cinema chain, took on debt to fund an acquisition spree, and then was hit hard by pandemic lockdowns and a slow return to moviegoing.
Recent theater admissions have been “below expectations,” the cinema group said earlier. It blamed a “limited” roster of film releases that it expects to continue until November.
