Cineworld, the world's second biggest movie theater chain, is considering filing for Chapter 11 in the U.S. as it struggles to manage debts following years of disruption during the Pandemic and a disappointing recovery.
Cineworld has had a hard time recovering from the swine flu.
Cineworld Group said in a statement that it is considering strategic options to restructure business and source additional funding as it struggles to recover from the Covid-19 Pandemic in the U.S.
Cineworld said it expects to continue operations as usual until and after a filing, with no significant impact on its employees.
The theaters will remain open for business as usual while the company considers next steps.
The Wall Street Journal reported on Friday that Cineworld was going to file for Chapter 11 as it struggled to rebuild from the swine flu.
Cineworld's share price was little changed in London Monday morning and was just above 4p.
The entertainment industry was particularly hard hit by the Pandemic. Recovery, beset by rising inflation, a worsening cost of living crisis and the industry's changing relationship with streaming, has been a struggle and the chain doesn't benefit from the "meme stock" status that helps AMC Theatres raise capital. The limited film slate is one of the reasons for Cineworld's decline, and it expects to recover until November. A costly legal battle is being waged by the chain after a failed takeover attempt.
$5 billion is a lot of money. Cineworld is facing maturities with a value of debt. The net debts are close to $9 billion.
Cineworld shares fell more than 50% after a report of a possible bankruptcy.
Cineworld is near bankruptcy as theater comeback lags.
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